Confidential submissions are welcome as the ACCC looks into the cattle and beef industry

Competition, efficiency, transparency and trading issues in the beef and cattle supply chain are to be looked at in a market study just announced by the Australian Competition and Consumer Commission (ACCC).

The combination of issues raised through the 2015 Senate Inquiry into the effect of market consolidation on the red meat processing sector and the ACCC’s own work led the ACCC to undertake this market study. With $11.4 million in funding over four years, the ACCC is establishing an Agriculture Enforcement and Engagement Unit that will conduct investigations and engagement in rural and regional areas.

The ACCC is seeking information through written and oral submissions and will hold public forums in regional areas across the country to hear directly from interested parties. The ACCC will also be accepting confidential submissions.

“We understand that some market participants may fear retribution from commercial partners for speaking to the ACCC. Equally, firms may be reluctant to provide the data we need to understand the complete picture,” ACCC Commissioner Mick Keogh said.

“Therefore, we have established a strong confidentiality regime to assure interested parties that we will treat any confidential information sensitively. We will also accept information from anonymous sources,” Keogh said.

The study will examine:

• competition between buyers of cattle and suppliers of processed meat to downstream customers
• the implications of saleyard attendees bidding on behalf of multiple buyers
• impediments to greater efficiency, such as bottlenecks or market power at certain points along the supply chain
• differences in bargaining strength and the allocation of commercial risk between cattle producers and buyers
• the transparency of carcase pricing and grading methods
• the share of profits among the cattle and beef production, processing and retailing sectors
• barriers to entry and expansion in cattle processing markets.

The ACCC will analyse information collected from submissions and forums and will publish draft findings for further comment, likely in September, followed by a final report, likely in late November.

The Issues Paper and further information on the market study will be available from 7 April 2016 at www.accc.gov.au/agriculture.

Image credit: ©iStockphoto.com/Eric Isselée