Costa pushes to scrap mushroom levy

Largest mushroom growers calls for end to statutory levy

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ISSUE: Australia's largest mushroom grower, Costa Mushrooms, has called for the scrapping of a statutory mushroom levy, saying it doesn't deliver results for growers.

ISSUE: Australia's largest mushroom grower, Costa Mushrooms, has called for the scrapping of a statutory mushroom levy, saying it doesn't deliver results for growers.

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A not-so-new fight has sprouted in the mushroom industry over a levy.

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AUSTRALIA'S largest mushroom grower, Costa Mushrooms, has again called for the scrapping of a key industry levy.

A full page advertisement in this week's The Land newspaper made a case to "stop the mushroom levy from destroying our industry" and encouraged growers to "vote to abolish the mushroom spawn levy".

Under the Department of Agriculture Levy Guidelines, Costa Mushrooms can use its right as a levy payer to call for a vote on the Agaricus Mushroom Statutory Levy.

Costa claims that since the mushroom levy was doubled in 2014, $18 million of growers' money has been wasted on ineffective marketing and administration.

"This is the most of any fresh produce category, yet there has been little to no growth in household consumption of mushrooms," the advertisement said.

"While other categories which do not have a compulsory levy, such as blueberries and tomatoes, have achieved significant growth, the mushroom industry has spent more but received the least return to levy payers."

But the Australian Mushroom Growers' Association (AMGA) has hit back, saying it "strongly believes removing the statutory levy is not the answer".

BOLD: The full page advertisement placed in The Land newspaper by the Costa Group.

BOLD: The full page advertisement placed in The Land newspaper by the Costa Group.

It has encouraged all levy payers to have their say and participate in the voluntary postal vote in November.

A 12-page document on the AMGA website details the reasons for maintaining the statutory levy, including the continuation of a world class research and development program, and acting as a mechanism to prevent large growers from opting-out and benefiting from the marketing and promotion (M and P) investment of others.

According to the document, the levy investment has helped the industry to grow production by 20 per cent over the past decade.

It's not the first time Costa has pushed for a levy change.

During the independent review of Horticulture Australia Limited (now Hort Innovation) in 2014, a public submission from Costa voiced concerns over levy management, particularly that of the mushroom levy.

What is the levy?

ACCORDING to the AMGA, the Agaricus Mushroom Statutory Levy (the Levy) was originally introduced in 2002.

Prior to that, since 1967, producers funded R and D and M and P through a voluntary levy.

The levy is collected on a production input, the amount of mushroom spawn that is essential for commercial production of Agaricus mushrooms.

Growers who purchase mushroom spawn from an Australian mushroom spawn seller pay the levy to the seller who then pays this to the Department of Agriculture.

As of July 1, 2018, the levy has been $4 per kilogram of mushroom spawn, of which $1.08 is for research and $2.92 is for marketing.

Costa's mushroom kingdom

COSTA'S mushroom category has facilities across the country including locations in Mernda, Victoria; Monarto, South Australia; and Casuarina, Western Australia.

Within the category, its portfolio of brands includes Costa Mushrooms and Adelaide Mushrooms.

Last year, Costa closed its Spreyton mushroom farm in Tasmania, citing the levy as a contributing factor to the closure.

Costa corporate affairs manager, Michael Toby, said at the time that the levy cost the company $1.7 million per annum.

"Most of it goes to marketing and we don't believe we get any benefit from it," he said.

Costa's recent full page advertisement on the levy said the AMGA supported the doubling of the levy and "needs to take responsibility for it".

"Growers should be able to directly invest the levy money they currently pay in their own marketing rather than have their money wasted through the ineffective mushroom levy," it said.

"As a levy payer and the largest mushroom grower, Costa is not content to watch our industry be destroyed and has requested a ballot to abolish the compulsory mushroom spawn levy."

"If we do not act now, then the next six years will be no different to the last six."

It also closed a Queensland mushroom growing facility at North Maclean. Costa invested a significant sum of money in a more modern site in South Australia.

Mushroom body fires warning

AMGA chair, Dr Geoff Martin, said Australia's statutory levy is internationally hailed as being the best.

"In particular the funding for R&D which is matched dollar for dollar by the Federal Government is the envy of them all," Dr Martin said.

"Do we want to go down the path common in Europe, where large mushroom corporates such as Monahan for example run their own research centres and keep all the acquired knowledge to themselves?

"Knowledge is a public good and private funding of R and D is the ultimate market failure.

CLOSED: The Costa Group mushroom farm at Spreyton which closed in November 2019.

CLOSED: The Costa Group mushroom farm at Spreyton which closed in November 2019.

"Do we really want to throw the 'baby out with the bath water' by dumping our world-renowned Mushroom Industry Statutory Levy at the behest of a corporate, whose senior management come and go, whose interests lie with its shareholders and their 'bottom line' rather than those of the Australian Mushroom Industry as a whole?

"Let me make the situation as clear as I possibly can; if we lose the statutory levy we will never get it back again.

"I and others who have worked in this industry in other countries have seen the effect upon mushroom consumption when large players contributing into voluntary marketing schemes have fallen out and funding has ceased; it is not pretty."

The anonymous postal ballot will be confidential and independently audited through Link Market Services.

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