ACCC pushes for mandatory buyers register at saleyards

The Australian Competition and Consumer Commission has just released an interim report from the study, which says it shares producer concerns about conduct in cattle markets, particularly saleyards.

Random and unannounced carcase grading audits at processing plants, with the results made publicly available, was another key recommendation.

ACCC Commissioner Mick Keogh said complaints about saleyard behaviour and carcase grading were common during the course of the study.

The ACCC’s assessment was that prices for many cattle transactions were not reported, or poorly reported, resulting in producers and buyers not having the data they need to make informed business decisions.

Some producer advocate groups are already saying the report’s recommendations are not hard-hitting enough, with particular disappointment expressed in the ACCC’s decision not to recommend mandatory price reporting of all non-saleyard cattle sales.

The report, however, does say that should market participants not take steps to improve reporting - it recommends the likes of expanded data collection including actual prices paid for over-the-hooks sales and live export cattle and a co-products index - the arguments in favour of mandatory reporting would become more compelling.

Producer groups said random audits were a long way from the independent graders they had been advocating for and recommending things like ‘buyers consider whether their price grids can be improved’ was flimsy.

Mr Keogh said ultimately the ACCC could rely only on objective information.

“It is a tricky process in that when someone comes and says last Tuesday this buyer did this and this agent did that - if there is not corroboration it is difficult to get to the bottom of,” he said.

However, the report indicated the ACCC would follow up, outside of this market study, on some specific allegations of cartel and anti-competitive conduct involving saleyards.

It listed an agreement between a vertically-integrated livestock agency and saleyard business which is alleged to have the purpose and/or the effect of foreclosing rival livestock agents from a saleyard as an example.

Bid-rigging in saleyard auctions at an east coast saleyard was another.

Mr Keogh said one of the abiding issues that struck commissioners was the low level of understanding of pricing grids and the way in which they worked.

“Typically, producers tend to leave it to their agent or someone like that and it surprised me the extent to which that extends to larger scale producers,” he said.

“It’s understandable. Where you have grids with more than a hundred boxes and eight to ten lines of qualifications underneath, to get from that to a likely price for your cattle, well even the most experienced would find it difficult.”

Processors said the industry was already actively working to address a number of the issues raised in the report, notably through the introduction of objective carcase measurement technology.

Australian Meat Industry Council Chairman Lachie Hart said the processing sector’s priority would be to utilise the consultation period to ensure the outcome of these recommendations strikes a fair balance between driving greater transparency without adding to the substantial regulatory burden already faced by industry participants.

The ACCC is seeking comments on the interim report by 23 November 2016.