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TAS Country : March 31st 2011
6 Tasmanian Country Friday, April 1, 2011 OPINION Probes must be milked for facts We are left with a complete lack of transparency about what the multinationals that own our milk processing industry are actually earning.' CHEWS theFAT David Byard THE current inquiry into milk by the Senate is nothing new. Over recent years we have had a series of inquiries into milk and other rural products like eggs, meat, vegies and fruit. One common theme or talking point from the enquiries has been the power of the supermarkets. This has been questioned and debated by a range of industry leaders, commentators, politicians, consumers and still nothing happens, why? These inquiries have all followed similar themes including that they have all cost a lot of money and have been a total waste of time and resources. We saw the ACCC asked to do an inquiry in 2007 by the then agriculture minister McGauran. When the results of this inquiry were shown to be flawed and full of inaccuracies, the ACCC simply brushed aside the criticism and stated that this was only a desktop study and as such the people giving evidence --- such as the supermarkets --- were not under any obligation to tell the truth. The 2007 ACCC report stated that the cost of livestock was only one component of the total cost incurred by the supermarkets and other retailers who provide fresh meat to consumers and it represented a small proportion of the final price of packaged meat. Documentation provided by one supermarket revealed that the price it pays for a whole beast typically accounts for 53 per cent of the end retail price. Is 53 per cent a small proportion of the final price? I think not. Meat and Livestock Australia (MLA) has suggests that the farmer gets about 30 per cent. Some 12 months later, the ACCC conducted a full inquiry into groceries and this time people were sworn to tell the whole truth. Sadly and amazingly, it did not stop farcical and non-factual evidence being presented at the inquiry. The supermarkets said the yield from a carcass of beef after skin, guts, and head are removed was 60 per cent meat and 40 per cent bone. This type of yield is unheard of. My information suggests that the same supermarket insists on a 71/29 per cent meat to bone ratio. Aus-Meats suggests that the average yield is 70-30 per cent. What made this error even more amazing was that the ACCC in its official inquiry referenced its desktop study. This makes a mockery of the official grocery inquiry where people were obliged to tell the truth and swear an oath. When this was brought to the attention of ACCC chief Graeme Samuel, he simply stated that the supermarkets only operate ona3per cent profit margin. He went on to say that if people don't believe this fact they should have a bex and a lie down. With comments like this from the independent umpire you could be led to believe Mr Samuel was an apologist for the supermarkets. We are now in the midst of a Senate inquiry into milk. Supermarkets have told this inquiry they have a 23 per cent margin on milk and have since said they have reduced that margin even further. Some senators seem aware that some of the information provided by the supermarkets may not have been factual. The committee has made some very interesting recommendations but these have been ignored by the government. Why do we have costly, time consuming inquiries into the supermarkets and the price of food and continue to have the recommendations ignored? One recommendation of the the most recent Senate committee was that the ACCC be requested to use its information gathering powers to provide more accurate estimates of what the milk producer receives, what the processor gets and what the retailer gets. This information was to have been provided by December 30 last year and is just one of a several recommendations that have not been acted upon. We are left with a complete lack of transparency about what the multinationals that own our milk processing industry are actually earning. Coles has come out with a very interesting fact sheet in the lastest inquiry. They maintain that their aim is to deliver better prices for consumers and that by reducing grocery prices they help contain inflation. My research suggests that the price of milk has not been a $1 a litre since 1992. Perhaps the time has come for the ACCC to have a small division that can gather information about every step of the way for all rural products, meat, milk, eggs, fruit and vegetables. For example carrots are 8.8c/kg in the paddock, while on the supermarket shelf they are $2.38/kg. What's the price to dig, wash and bag carrots? This information can be checked to see if everybody is telling the truth. If the Government wants to develop good policy on food prices in Australia, there needs to be confidence in the independent umpire and less reliance on spin and half-truths. Farms under fire in dairy war SUPERMARKETS have admitted the milk price war puts dairy farmers in the gun. The admission comes as Coles signals chicken-meat growers will be the next group of farmers to have the supermarket price of their produce slashed. Woolworths fresh food general manager Pat McEntee yesterday told a Senate inquiry into milk prices there was ''potential for this price drop to flow back to processors and farmers'' and that this would ''affect the sustainability of the industry''. Mr McEntee said that the price drop could ''potentially . . .flow right through the supply chain''. Liberal Senator Bill Heffernan told Mr McEntee the milk price war was ''about market share and (Coles boss Ian) McLeod's bloody bonus''. Mr McLeod -- in line for a $38 million bonus if Coles meets perform- ance targets -- has vowed there will be more price cuts rolled out over the next few weeks after the supermar- ket announced it was slashing chick- en breast fillets by $2.10 per kg. Mr McLeod told the Senate inquiry farmers had been ''understanding and supportive'' when the reasons and strategy for the price cut had been explained to them. He said Coles was aware of hard- ship facing many Australian far- mers'' and made a big contribution to rural and regional Australia. 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March 24th 2011
April 7th 2011