Minced by the supermarkets: ABA

Posted by Daniel Palmer on 12th May 2008

The Australian Beef Association have reiterated their belief that supermarkets are taking consumers for a ride with regard to meat prices.

ABA Chairman, Brad Bellinger, has suggested that the ACCC Grocery Inquiry do “some very serious investigations into the Australian meat chain”. The latest claims from the ABA follow their submission to the ACCC in March – when they indicated that cattle prices were 25% less in Australia than the US yet Australian beef retail prices were about double those of retail prices in the US. Concerning figures have apparently emerged from their UK comparison as well, with consumers paying twice as much in Australia despite producers receiving similar prices.

According to the ABA, the issue was fuelled when one of their members went shopping for Australian beef in Tokyo and found that, despite a 38% tariff being imposed on imported beef, lean mince prices were still a couple of dollars a kilo cheaper ($11 compared to $14 in Australia).

“ABA is into top gear in investigating the mark ups. We have calculated that the retail mark up on beef mince exceeds 100%. This contrasts with a supermarket submission to the ACCC Livestock Price Inquiry of 2006-2007, where they claimed a 3% mark up,” Mr Bellinger said.

“The more we study the mark ups in the Australian meat chain the angrier we are getting. Australian producers are getting under 28% of the consumer dollar, whilst US producers get 47%.”

Woolworths and Coles have disputed the claims, asserting their belief that they are price competitive with Woolworths dismissing the ABA claims as “unsubstantiated” and “inaccurate”.

The 2006 meat price inquiry by the ACCC did find that retail prices were competitive but since then pressure on the major supermarkets has only increased as consumers concerns over grocery prices escalate.

The ACCC are still continuing their grocery price inquiry, with a final report due to be completed by July 31.