ACCC focuses on cattle and wheat supply chains

Businesses can supply information to a competition watchdog study on beef and cattle study anonymously, while the regulator has also widened wheat supply-chain access.

The Australian Competition and Consumer Commission (ACCC) is calling for submissions from agribusinesses for a market study into competition, efficiency, transparency and trading issues in Australia’s cattle and beef supply chain, as it increases its influence in Australia’s agri markets.

The study will look at competition between cattle buyers and processed meat suppliers, the implications of sale-yard attendees bidding on behalf of multiple buyers, bottlenecks in the supply chain, bargaining strength along the supply chain and pricing transparency, as well as barriers to entry and expansion in cattle processing markets.

“Competition and consumer issues in the agriculture sector are a priority for the ACCC,” its chairman Rod Sims said in a statement.

“The cattle and beef market study is the first of several agricultural market studies that the ACCC will conduct over the coming years. A number of ACCC commissioners and I will be closely involved in the market study, including at the public forums.”

As well as looking for submissions from producers and supply-chain businesses, the ACCC will hold public forums across the country and accept confidential submissions.

The ACCC expects to release a final beef and cattle competition report in November.

“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,” said commissioner Mick Keogh.

The ACCC has been increasingly vocal on the issue of competition in Australian agriculture. The Agricultural Competitiveness White Paper, released in July 2015, promised A$11.4 million ($8.17 million; €7.45 million) to create “a more farm-savvy and proactive ACCC [to] encourage fair-trading and strengthen competition in agricultural supply chains”, according to its website. Other white paper projects include improving transport and infrastructure to decrease costs often passed on to farmers.

In March, Sims voiced concerns that agricultural supply chains could be hurt if the Port of Fremantle’s future owner is also given rights to develop a second port to the south, saying: “This is an area of concern to the ACCC because natural monopoly infrastructure can act as a bottleneck, hindering competition and efficient investment in upstream and downstream markets along the value chain.”

The competition watchdog will also allow several wheat export facility providers to be exempt from rules that might affect their ability to compete with bigger players.

Asciano’s Patrick bulk wheat facilities at Port Adelaide and GrainCorp and Quattro bulk wheat export facilities at Port Kembla are now exempt from competition conduct requirements, such as publishing their expected port capacity or getting approval for capacity allocation systems six months in advance. They also do not have to resolve access agreement negotiation disputes through the prescribed process, which can be long and difficult.

Australia’s leading bulk-wheat supplier Viterra uses Glencore facilities at Port Adelaide. Other suppliers, however, use the Patrick facility and the ACCC said providing the exemption would “[encourage] small-scale entry into the grain supply chain”.