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Proposed Senate inquiry into red meat processing is gaining Senators’ support

Terry Sim, March 5, 2015
NSW Farmers Cattle Committee chair Derek Schoen

NSW Farmers Cattle Committee chair Derek Schoen

A proposed Senate inquiry into red meat processing consolidation is gaining support in major political parties, despite Treasurer Joe Hockey’s approval of the sale of smallgoods company Primo to the Brazilian-owned JBS, NSW Farmers said today.

NSW Farmers Cattle Committee chair Derek Schoen said a Senate inquiry would continue to be sought “with great vigour”.

“We believe we have to get to the bottom of this processor power.

“We believe the boycott in Barnawatha was just the tip of the iceberg and it definitely has to be investigated.”

Mr Schoen said a lot of senators had been lobbied to support a Senate inquiry.

“We’ve had provisional say-sos from across the board – from Labor, Liberals, Nationals and the Greens.

“We anticipate that the Senate inquiry will get up,” he said.

NSW Farmers was surprised by the breadth of support for the proposed inquiry.

“There is a general feeling out there that it is needed.”

About 300 beef and sheepmeat producers attended a meeting at Barnawatha on Monday, called by NSW Farmers and the Victorian Farmers Federation to lobby politicians in support of a Senate inquiry.

Hockey JBS-Primo contract kill condition “a win of sorts”

Mr Schoen said NSW Farmers was very disappointed that Federal Treasurer Joe Hockey had approved the sale of smallgoods manufacturer Primo to Brazilian-owned company JBS before the proposed Senate inquiry.

“It’s a win of sorts.

“I think it has vindicated our stand against the Australian Competition and Consumer Commission rubber-stamping the (JBS) takeover (of Primo),” he said.

“If the Scone abattoir remains open and there is guaranteed contract killing space, that is a win for our members, especially for some people trying to get a niche brand out there; they need to have killing space.

“Guaranteed contract killing space is vital for the industry to progress in the value-adding area for producers.”

Hockey approves JBS purchase of Primo with conditions

Mr Hockey approved a purchase proposal by JBS USA Holdings Inc (JBS), through its wholly-owned subsidiary, JBS Smallgoods HoldCo Australia Pty Ltd, to acquire Australian Consolidated Food Holdings Pty Ltd (Primo), subject to a number of conditions relating to services provided by Primo’s abattoir at Scone, NSW.

Mr Hockey said as part of the proposal, JBS has agreed to:

– continue to maintain the custom service killings currently provided by Primo at its processing plant in Scone, New South Wales. (Custom service killing refers to arrangements between the abattoir and third parties whereby the abattoir provides processing services to a third party for cattle acquired by that third party.)

– continue to maintain the custom service killings in good faith and to the best of its endeavours in both a competitive and profitable manner; and

– provide reports to the Foreign Investment Review Board (FIRB) on its compliance with the above condition every six months, until otherwise advised by FIRB.

The conditions will be reviewed in three years.

NSW Farmers to keep “close eye” on FIRB

Mr Schoen said NSW Farmers would be keeping a “very close eye” on the FIRB review and auditing process.

Minister for Agriculture, Barnaby Joyce, yesterday said that conditions attached to the sale of Primo to Brazilian company JBS would ensure that local cattle producers would have certainty around access to the Scone abattoir for contract processing.

Mr Joyce said if JBS failed to keep the Scone abattoir open and retain its capacity for consignment killings accessible by third parties, Mr Hockey has the power to order the company to divest.

“These conditions meet the demands of a number of producers, farming organisations and other concerned stakeholders that I met with or who contacted my office regarding this issue.

“I acknowledge that there were calls for more than this, but given the outcome of the Australian Competition and Consumer Commission (ACCC) decision, there was every chance that we may have gotten less,” he said.

“With these stringent conditions in place I believe the treasurer has found an appropriate balance for all parties using his powers under the Foreign Investment Review Board (FIRB) framework.”

 

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