ACCC sheep meat study call from former WAFarmers leader

Terry Sim November 4, 2016
Former WAFarmers leader Dale Park.

Former WAFarmers leader Dale Park.

AUSTRALIA’S competition watchdog needs to take a closer look at the national sheep saleyard and meat marketing system, according to former WAFarmers president Dale Park.

Mr Park said he would be taking up the issue of competition in the WA sheep meat market with WAFarmers, but he believed the Australian Competition and Consumer Commission should undertake a national market study into the lamb and mutton sector.

“Calling for an inquiry into the sheep market wouldn’t be out of place.”

The Badgingarra beef producer no longer runs sheep, but in his last days in the WAFarmers presidency defended the wool industry against a social media animal activist campaign and still maintains an interest in the sector.

Despite recent WAFarmers concerns about the well-documented disparity between eastern states and WA sheep meat prices, Mr Park said if the ACCC was to initiate a market stud of competition in Australia’s sheep meat marketing system, it would need to be around structure not pricing.

“The lack of competition is where we will have to start from and say what is causing that (price disparity)?”

The ACCC recently completed its cattle and beef study, citing several concerns about anti-competitive behaviour in the sector, but despite hearing submissions from sheep producers about similar issues has been silent on the issue.

The ACCC’s interim report on its cattle and beef market study 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 is also investigating alleged anti-competitive conduct in saleyards and has said it will continue to monitor concerns about collective behaviour by cattle buyers, including cattle purchasing boycotts designed to alter industry practices, and concerted practices in cattle acquisition markets.

After attending the first meeting of the ACCC’s Agricultural Advisory Committee in May this year, then Sheepmeat Council of Australia chief executive officer Mark Harvey-Sutton said the ACCC Agriculture Unit would welcome information from the broader red meat industry to inform its market study, including from sheep meat producers. However, it is not known how many sheep industry submissions the recent ACCC study received.

The Senate Rural and Regional Affairs and Transport References Committee Inquiry into the effect of market consolidation on the red meat processing sector, which the ACCC study followed, also heard several submissions from the sheep sector expressing concerns of a similar nature to those dealt with in the ACCC’s study.

Mr Park said he attended an ACCC beef and cattle market study consultation forum in Bunbury in July this year and told it he believed WA processor V. and V. Walsh bought and supplied lambs for the two major supermarkets, Coles and Woolworths.

“I would have thought that would be cause for concern.

“I have said to the ACCC that we should be looking at both (cattle and sheep) ….. we’ve got a problem in both industries and in this state in particular, because V. and V. Walsh are buying for both supermarkets, it is more of a problem,” he said.

“I think we do need to look at the sheep industry.”

However, Mr Park recognised that resourcing might be an issue for the ACCC Agriculture Unit and that the commission needed to not only make findings, but also win in court cases to make a real difference.

“It has to be an absolutely watertight case.”

Mr Park believed that sheep meat prices were higher in eastern states due to better competition.

“We rely on live export to give a bit of competition.

“The east doesn’t actually need that and most of us have recognised that that is the most important part of live export,” he said.

Despite live exports of sheep from WA, sheep meat prices in the state were still behind eastern states’ rates, but Mr Park believed for the first time the industry had an opportunity for market studies with the creation of the ACCC Agriculture Unit.

“You need an organisation like the ACCC to do these studies because they are pretty good at it and they understand how markets work and how this whole thing should operate — previously MLA would not have had the expertise to do it.”

Questions put to WAFarmers, V. and V. Walsh and to the ACCC by Sheep Central around competition issues in the sheep meat industry were not answered before this report was published. V. and V Walsh director Peter Walsh did not respond to numerous attempts to contact him.


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