Beef industry calling for a Royal Commission

Posted by Daniel Palmer on 10th July 2008

The Red Meat Action Group (RMAG) has now added their support to Australian Beef Association (ABA) calls for a Judicial Inquiry into the Australian Beef Industry.

The RMAG believe the situation facing beef producers at the moment is of major concern. “The current state of affairs, exacerbated by the gas crisis, facing Western Australian beef producers particularly and as a result the entire industry, clearly demonstrates the need for such action,” they claimed in a statement. “World cattle prices continue to rise, while Western Australian producers receive prices similar to the 1980’s, all while Western Australian consumers are faced with paying the highest retail beef prices in the country; – if not the world.”

The RMAG dismissed as “utter nonsense” claims by leading retailer Woolworths that the RMAG and ABA complaints were baseless. “Woolworths now say they used a particular $10 cut of beef to demonstrate how little return they make on beef sales, when paying the producer $3.80 for the product. This Woolworths assertion not only shows our claims to be true but treats producers with contempt and shows why many producers now hold Woolworths in such low esteem,” the RMAG stated.

The ABA has made clear their concerns for a number of months with their submission to the grocery price inquiry highlighting their disappointment and suggesting the ACCC should do “some very serious investigations into the Australian meat chain”. According to the ABA, the issue was fuelled when one of their members went shopping for Australian beef in Tokyo and reportedly 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).

In calling for a Royal Commission ABA Chairman Brad Bellinger cited his belief that mark-ups by Australian supermarkets were unreasonably high. “ABA research and our submission tendered to the ACCC Inquiry into Groceries have shown that the Australian supermarkets have by far the highest mark-up in the world, as they rort Australian consumers and producers,” he claimed.

The grocery price inquiry has now been completed, with the ACCC due to provide their final report to the Federal Government at the end of this month.