ACCC threatens to advocate beef cattle market “legislative change”

Mr Keogh made the forthright threat in a letter to the Senate Rural and Regional Affairs and Transport References Committee, updating its long-running inquiry into red meat supply competition issues, on how he viewed progress on the 15 recommendations in the Australian Competition and Consumer Commission’s (ACCC) market study.

In the letter, Mr Keogh also made direct reference to the evidence given by the Red Meat Advisory Council (RMAC) at a recent hearing of the Senate inquiry, in Canberra, which has been identified, but criticised, for its leadership role.

The warning also comes after Victorian Nationals Senator Bridget McKenzie warned industry groups like the RMAC, the Cattle Council of Australia, and Meat and Livestock Australia (MLA) had their ‘heads in the sand’ about the inquiry’s potential - with a report due out later this year - to back a mandatory industry code of conduct, if progress on the ACCC’s recommendations remained stalled.

Mr Keogh’s letter said the ACCC’s market study into the beef and cattle market, which reported in March this year, delivered a final report that contained a “diverse range of recommendations mostly for action by industry bodies, rather than government”.

“These recommendations are aimed at delivering reforms in the industry which would lead to an increase in transparency, efficiency and competition,” Mr Keogh wrote.

“It is important to clarify that the ACCC itself is not in a position to mandate that the industry adopt particular practices.

“However, we strongly believe that change is necessary in the industry.

“Accordingly, the ACCC will monitor whether progress is made in line with our recommendations.

“If progress is limited, we will consider the need to strengthen our recommendations.

“In particular we will look closely at whether we need to advocate for legislative change, rather than industry-led change.”

Mr Keogh’s letter clarified that it understood RMAC didn’t have legal authority to mandate that industry participants implement the ACCC’s recommendations.

But he said the ACCC identified the industry participants “who we consider to be in the best position to implement or progress certain recommendations”.

“For example we allocated responsibility for recommendations 4 and 5 regarding price reporting to both MLA and the industry participants who hold the data,” he wrote.

“However, as identified by RMAC during its hearing, RMAC is in a unique position in the industry.

“RMAC is the only organisation that regularly holds discussions with a wide range of industry participants and then advocates on behalf of members directly with the Minister for Agriculture and Water Resources.

“As a result, RMAC is uniquely placed to facilitate discussions about implementing the ACCC’s recommendations and to report back to the Minister on progress.

“The ACCC did not want to burden the industry with costs associated with establishing an industry body for this purpose, and therefore did not recommend this (but) we still hold the view that there is no other organisation with capabilities that are more suitable than RMAC’s.”

Mr Keogh also clarified RMAC’s efforts to contact RMAC ahead of the final ACCC report and since it was released in March.

He said he spoke to the RMAC prior to the final report being released to discuss its oversight role and then throughout April, May and July of this year “attempting” to arrange a meeting to discuss recommendation 15 and the ACCC’s view of the role RMAC would play.

“A meeting with RMAC to discuss these matters took place on August 25, 2017,” Mr Keogh wrote.

RMAC Independent Chair Don Mackay and CEO Anna Campbell appeared at the Senate inquiry hearing on August 16 in Canberra.

RMAC has been contacted for comment.

But at the recent hearing, Senator McKenzie referred to RMAC’s inquiry submission which it said they didn’t believe they were the appropriate body to oversee the implementation of the ACCC recommendations, to which Mr Mackay said “Yes”.

“We will have a role from an industry perspective - but in terms of straight oversight, I don't think we're the correct organisation,” he said.

Ms Campbell said the ACCC only raised that point - about RMAC’s oversight role - on “the day the announcement was made”.

“And during the interim report we did provide a submission to the ACCC which is very much consistent with the briefing paper we provided,” she said.

An RMAC spokesperson said the red meat and livestock businesses around the RMAC table – from beef producers to food manufacturers – as a whole considered the market place to be operating well.

“RMAC will continue to work constructively with the ACCC Agricultural Unit on meaningful initiatives we believe will be valuable to Australian red meat and livestock businesses and that any policy measures put in place are evidence based and position the industry for prosperity,” the spokesperson said.

Mr Mackay told the Senate hearing AMIC were now meeting and working with the ACCC “to try and do a gap analysis on what the ACCC is recommending, what currently exists and what can be done”.

Queensland Nationals Senator Barry O’Sullivan said “it doesn't matter how you get there on Christmas Day, as long as you get there”.