Cartel-conduct in the cattle and beef industry
AUSTRALIA'S cattle saleyard auctions have some 'serious shortcomings' with intimidation and physical violence affecting the industry's competitiveness.
An Australian Competition and Consumer Commission report into the cattle and beef market released Monday states it was provided with evidence of people being punished for not following the strategies employed by other cattle buyers.
The strategies were to orchestrate the bidding to keep the prices low, with buyers taking it in turns to bid instead of competing with one another.
The punishments for not colluding included "social isolation, physical intimidation and sometimes violence".
"(They) 'punish' those who break away from any 'agreed' bidding strategies in an effective and timely way (for example, by continually outbidding them in subsequent weeks)," the report reads.
"The buyer's (and his or her family's) social networks within the local community also provide a broader range of options for 'punishment'."
The ACCC launched the market study into the cattle and beef industry in April 2016 after issues were raised through previous investigations and the Senate inquiry into the effect of market consolidation on the red meat processing sector.
"In the course of our market we've listened to a wide range of industry concerns about anti-competitive conduct, industry practices, and market structures," ACCC chair Rod Sims said.
"The ACCC's interim report has identified serious shortcomings in current price reporting and the independence and auditing of carcase grading, and concerns about cartel and other conduct affecting competition in saleyard auctions.
"During the course of this market study, we have heard specific allegations of cartel and other anti-competitive conduct involving saleyards which the ACCC is now accessing separately."
There was also concerns raised by cattle producers about the weighing practices at saleyards.
"Much of the debate relates to the amount of time that elapses between curfew and weighing, and perceptions of who is commercially advantaged by this," the report reads.
"Issues raised by producers in favour of pre-sale weighing centre around whether the bidding confidence of some buyers is impacted by the weight of the animal being unknown at the time of the sale."