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Oz Destiny? Seeking a Fairer Meat Market

12 June 2008

AUSTRALIA - The Australian Beef Association is urging the government to seek a fair and truly competitive domestic meat market model, if consumers are to get value for money.

ABA Chairman, Brad Bellinger said, Unless the current duopoly of two major supermarkets and the resultant inefficient market structure is reformed, consumers will continue to pay up to twice what they should for beef, lamb and other produce.

Food producers appearing at the ACCC Grocery Inquiry have all identified the supermarket duopoly as the single biggest contributor to poor farm gate prices and inflated prices at the checkout; - they can't all be wrong'.

Mr Bellinger has congratulated his ABA team for their impact on the Grocery Inquiry. He said, 'Our team is alone in representing beef producers. The levy funded supposed 'Peak' Beef organisations have not even appeared. For the first time beef producers' hopeless share of the consumer dollar is being highlighted in the media. The US and UK producers get 47% of the consumer dollar, the Australian producer gets 25% and the retailer gets 50%. When the investments in the producer and retail segments are compared ' it is obscene'.

He continued, 'We need a reallocation of the current consumer dollar - starting with an increase of 15% to 40% for producers, 25% for processing and transport, 20% for retailers and a reduction of at least 15% for consumers. This will give a 'win win' situation for producer and consumer.

He stated that it was time for Minister Burke to read the evidence submitted to the ACCC by primary industry groups and to prepare for action. 'If the Minister doesn't believe the testimony of ABA and vegetable groups, he should inspect the profit and loss statement of Coles and Woolworths and compare them with farm accounts.

The Minister needs to:

  • Reform the industry organisations, starting with the tax-payer funded Meat and Livestock Australia, and the parasitic Peak Councils and Red Meat Advisory Council.
  • Introduce new competition laws that stop the major supermarkets, with over 50% of the market, blindly exercising their market power to crush competition in the food supply chain.'

He said that legislative investment in 'infrastructure reform' will double food chain efficiency and lower prices to consumer. Australian Government is a century behind the home of free enterprise, the USA, which has Anti Trust laws, many supermarket chains and beef retailing at half the cost of Australian beef. Productivity gains will deliver no-cost dividends to processors, consumers, producers, rural communities and the environment - and fight inflation.

Mr Bellinger concluded by saying, 'There is no use Government complaining about higher food prices - they have the power to regulate and produce a fair market. We hope that the ACCC Report illustrates the corrupted food chain and that the Government then acts quickly. We are ready to remind them.'

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