Processor says no monopolies

By Country News on November 24, 2015

A major meat processor says livestock markets are operating efficiently and there are no monopolies affecting competition.

In a submission to the Senate inquiry into the red meat industry, JBS Australia said there were more than 30 beef processors on Australia’s eastern seaboard and the market was highly fragmented and highly competitive.

‘‘Whilst processors may be of various sizes and have different market focus, each vigorously competes in the market for the acquisition of cattle,’’ the submission said.

‘‘In addition, there are other competitors for livestock in the market including livestock producers (restockers, feedlotters and backgrounders), brand owners and livestock agents, supermarkets and live exporters.’’

JBS Australia said there were no ‘‘regional monopolies’’ of processors.

‘‘The spread of national, large, mid-size and smaller processors across the eastern seaboard and the ability to move cattle across jurisdictions means that no one processor has any monopolistic power.

‘‘Even if a processor endeavours to distort the price for cattle in one regional area (which it cannot), affected producers could hold their cattle (based on seasonal conditions) and would sell their cattle through other processors, either direct or through other saleyards, or to other processors to counter that price distortion.

‘‘The market for the sale of livestock is dynamic and adapts to seasonal conditions.

‘‘The processing industry is characterised by periodic increase and decrease of capacity and entry and exit of capacity and competitors,’’ the submission said.

By Country News on November 24, 2015

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