THE push for mandatory price reporting of non-saleyard cattle sales and the price beef products trade at throughout the supply chain has ramped up as the fair trading watchdog puts its final touches on a market study into competition in the industry.
The feedback period on the Australian Competition and Consumer Commission’s interim report, following a six-month investigation, has now closed and a final report is expected before March.
The Australian Beef Association (ABA) this week put out a call for the ACCC to be given more power to collect information in the wake of identifying ten-year-old data in the interim report on the percentage of the retail beef dollar producers receive.
Mandatory price reporting (MPR) has been put forward as a means of providing a clearer picture of where the profit in the supply chain sits in order to address what some see as unequal bargaining power between producers and the increasingly concentrated retail and processing sectors.
The ACCC interim report referred to information supplied by supermarket giant Coles in 2007 as to the breakdown of retail prices, which had the chain receiving just a 3pc margin and farmers receiving more than half the retail dollar.
ABA executive officer David Byard says that was ‘entirely erroneous and misleading’, with industry service provider figures indicating the average for the ten years to 2015 was 32pc for farmers.
He said because retail giants chose not to give evidence for this market study, and were under no legal obligation to, outdated information was used.
The danger, he said, was legislative decisions on competition in the cattle game could be based on wrong data that would be to the producer’s detriment.
ACCC agriculture commissioner Mick Keogh confirmed the 2007 data was the only information available to the authority at the retail level and acknowledged it was contentious.
However, it was used as an example of the sort of calculation that might be required, and how broad the information needed to be, if MPR was to be implemented, he said.
The interim report did not recommend Australia implement mandatory price reporting as is used in the United States.
“One of the difficulties is the US beef industry is domestic-focussed and virtually every animal slaughtered is finished in a feedlot - it is a more standard supply chain,” Mr Keogh said.
“Australia is supplying many international markets, from live exports to Japanese ox, and it is nowhere near as standard a product to report on.
“So it is questionable as to whether MPR would generate extra value for producers.”
He said ABA’s call for compulsory data gathering powers leads to a more general point in that the ACCC has two types of inquiries.
“One is internally-initiated and doesn’t have any compulsory information gathering powers - it is the sort of market study we are doing here,” he said.
“Where the study is initiated by the government, as is the case with the dairy market investigation we are just starting, the legislation confers powers of compulsory information gathering.”
Mr Keogh said there had been substantial feedback received on the interim report, particularly from industry organisations.
Responses tended to be focussed on whether they agreed or disagreed with recommendations and there were ‘no great surprises in positions taken’, he said.
In response to processor and agent criticisms of small survey samples being used to back findings of uncompetitive behaviour at saleyards, he said the method was justified.
“Concerns were raised by producers about commission buyers and agents acting for both buyer and seller in one transaction,” he said.
“The industry group’s response was that never happened.
“To check whether that stacked up, we collected random data from a small number of sales.
“It was never meant to be a comprehensive study, rather a test to see if that did in fact occur.
“It took only a small number of samples to conclude the situation did occur.”
Mr Byard said the market study was appreciated by producers and thanked the ACCC and the Federal Government for taking the issues facing farmers seriously.