The report, which was released on Monday, found that the competitiveness of Australian beef and cattle markets could be improved by the implementation of a range of measures to lessen the risk of collusive and anti-competitive behaviour in saleyard auctions.
It comes after a six-month study of Australian beef and cattle markets, and the ACCC is now seeking industry feedback.
“In the course of our market study we’ve listened to a wide range of industry concerns about anti-competitive conduct, industry practices, and market structures,” ACCC chairman Rod Sims said.
“The ACCC’s interim report has identified serious shortcomings in current price reporting and the independence and auditing of carcase grading, and concerns about cartel and other conduct affecting competition in saleyard auctions.”
The ACCC’s assessment is 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.
There were also concerns about a lack of independence and transparency in the process of grading carcases at abattoirs. Concerns include whether the existing audit systems ensure the integrity of the grading process.
“Integrity and trust in the grading system are essential, given its role in determining payments and signalling the demands of the market to many producers,” ACCC commissioner Mick Keogh said.
The report has been widely welcomed by figures in the cattle industry, and Cattle Council president Howard Smith said it echoed producer concerns.
“The ACCC have recommended the industry move to objective carcase measurement as soon as possible, which would provide benefits to both producers and processors, and create efficiencies across the supply chain,” Smith said.
“Improvements to market reporting and information have been a focus of Cattle Council’s recent work with Meat and Livestock Australia.
“We will continue to drive this further, developing market reporting and tools that deliver outcomes producers but do not add regulatory or administrative burden to the industry.”
But according to Victorian Farmers Federation Livestock president Leonard Vallance, the recommendations should go even further.
“Pre-sale vs post-sale weighing, which was the catalyst for the whole investigation, seems to have been diluted by a myriad of supply chain issues,” Vallance said.
“The ACCC has pointed to pre-sale weighing of cattle as having benefits and increasing transparency in transactions, but it’s disappointing there was no recommendation forthcoming.”
Vallance also questioned the choice of industry watchdog Aus-Meat to act as an independent arbitrator between producers and processors.
“It’s vital that we have a fully independent arbitrator to ensure the integrity of the system, and we’re unsure that Aus-Meat is the best fit for that role,” he said.
“We need to seek more clarity around their proposed role and provide our feedback to the ACCC for further consideration.”
The ACCC inquiry into the red meat industry was initiated after an incident at the Barnawartha saleyards last year where up to eight processors boycotted a sale, wiping 20-30c/kg off the price of most cattle and leading to a third of export-weight cattle being passed in.
However, the evidence obtained by the ACCC did not demonstrate that the processors had reached an agreement or an understanding not to attend the sale.
“The Barnawartha boycott showed us that there is no level playing field in the Victorian livestock markets,” Vallance said.
“We’ve been fighting for more transparency in the livestock industry for 18 months and there’s still some way to go, but this report is an indication that we are having an impact.”
The ACCC is seeking comments on the interim report by November 23.
