Coles HGP Ban To Cost Beef Producers $20 Million

AUSTRALIA - The decision by Coles to ban the use of Hormonal Growth Promatants (HGP) will cost Australian beef producers at least $20 million per annum in lower cattle prices, Chairman of the Australian Beef Association, Brad Bellinger has said.
calendar icon 10 September 2010
clock icon 2 minute read

HGPs increase the growth rate and carcase yield of the average domestic trade steer by about $50 per head. This benefit accrues directly to lot feeders and processors. This higher productivity increases competition in all store and finished cattle markets.

“Logically, lot feeders and processors will pass this artificially added cost increase back to producers by lowering the price of store and grass finished cattle,” Mr Bellinger warned.

“The use of HGPs is not detrimental to human health and banning them will not improve eating quality.” The Coles’ ban on HGP will needlessly undermine consumer confidence and the local and international reputation of Australian beef.

“Coles’ ban on HGPs will ultimately harm the whole industry and deliver no benefits to consumers.

“This is a grubby sales tactic that should be deplored by all meat industry and consumer organizations,” Bellinger said.

Mr Bellinger said: “There was a real risk the HPG ban will be adopted by other supermarket chains and eventually independent butchers would be forced to comply as well. In this case, the cost to producers could exceed $100 million per annum.”

In addition to the loss of production, producers will bear the cost of the paper trail necessary to verify HGP-free status of individual animals. The National Livestock Identification System (NLIS) does not have the capacity to provide this information.

“The NSW DPI estimates HGPs add about $210 million to the value of the domestic and export Australian beef industry annually, Mr Bellinger said.

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