Senator Bridget McKenzie expects there to be sweeping changes to the way cattle are sold as a result of a Senate Inquiry into the structure of selling and consolidation of the processing sector. m051416

Senator Bridget McKenzie expects there to be sweeping changes to the way cattle are sold as a result of a Senate Inquiry into the structure of selling and consolidation of the processing sector. m051416

SENATOR for Victoria, Bridget McKenzie, said last week that there would need to be drastic changes made to the system of selling cattle in Australia if “explosive evidence” given on the final day of a Senate Inquiry into the beef industry was true.
Speaking on ABC Radio, she said that people in the street would describe the behaviour of key players in the industry as collusionary, corrupt and even illegal if they became aware of the allegations of anti-competitive behaviour that had been made.
And following the evidence given ‘in camera’ at the inquiry, it seems as if Senator McKenzie is inclined to believe those making the accusations.
“I can’t be specific about what was said in public but I can say that there is a real culture of fear and it has to change, absolutely.”
She said those with information about this unacceptable behaviour had to be allowed to provide input.
She said claims had been made about a “nod, nod, wink, wink” approach to selling pens of cattle and of “car trips between buyers and agents” that could compromise confidence in the selling system if not addressed.
“One side of the market has all the information but the producers don’t,” she claimed, noting this was especially so in her experience in the southern markets.
But local stock agents are doubtful about the claims.
“You’d need to be careful about making those sorts of accusations,” said veteran South Gippsland stock agent David Phelan.
He said the changing conditions of supply and demand often prompted different responses from buyers but he expressed strong confidence in the open market system of buying and selling.
Senator McKenzie is a Participating Member of the Rural and Regional Affairs and Transport References Committee which is looking into the “effect of market consolidation on the red meat processing sector”.
The issue was referred to the Senate Committee in March last year and while the public hearings wound up last week, a report is not expected back in the Senate until mid-August.
However, last week the Australian Competition and Consumer Commission (ACCC) announced it would conduct a market study into claims of anti-competitive and collusive market behaviour in the industry.
Nationals Senator Bridget McKenzie said beef processors should expect reforms to follow the inquiry’s final report.
The terms of reference for the Senate Inquiry were as follows:
The committee should consider:
(a.) The potential for misuse of market power through buyer collusion and the resultant impact on producer returns;
(b.) The impact of the red-meat processor consolidation on market competition, creation of regional monopolies and returns to farm gate;
(c.) The existing selling structures and processes at saleyards, particularly pre-and post-sale weighing, as well as direct sales and online auctions, and whether they remain relevant;
(d.) The regulatory environment covering livestock, livestock agents, buyers and meat processors; and
(e.) Any related matter.