Coronavirus: Abattoirs ‘may close because of wage plan’

Three Queensland meatworks employing a combined 4000 people could be shuttered indefinitely because of a market distortion created by the federal government’s JobKeeper scheme.

JBS Australia chief operating officer Anthony Pratt in a boning room at the company's meat processing plant at Dinmore, near Ipswich. Picture: Attila Csaszar

Three Queensland meatworks employing 4000 people could be shuttered indefinitely because of a market distortion created by the JobKeeper scheme.

JBS Australia has been unable to get JobKeeper for its employees because, as a con­glomerate, it has not lost the requisite 50 per cent of income to be eligible for the scheme.

However, its competitors that are eligible because of their smaller size or labour-hire workforce are suddenly without labour overheads, enabling them to outbid JBS on already ­record-high meat prices.

The company, which has already stopped work at its largest plant at Dinmore west of Brisbane, says its facilities at Townsville and Rockhampton could also be closed.

“We’re on a very uneven playing field and the distortion is so immense that we’ve got no chance of competing,” JBS Australia chief operating officer ­Anthony Pratt said.

“Even our bigger competitors are operating under multiple ABNs (Australian Business Numbers), whereas we operate under one ABN so our revenue is consolidated.

“We’ve just got no chance.”

The Dinmore facility was supposed to restart on September 7 but for how long remains uncertain.

Up to 70 per cent of the plant’s total operating cost is in wages.

“When we’re going out to try to buy cattle when our competitor has 70 per cent of their cost to operate subsidised by the federal government, they’ve got an awful lot more money in their pocket to bid for the available cattle than we do,” Mr Pratt said.

Workers at the Dinmore factory have already been operating on about 60 per cent of their regular income after shifts were slashed when the plant could not source enough meat to operate full-time.

Mr Pratt said many were preparing to leave in search of other work. “Nobody can survive on 60 per cent of their income long-term,” he said.

“They’re either leaving to look for other jobs or going on to JobSeeker where they’ve at least got a guarantee of what their income will be for that week.

“As we continue to lose our workforce, we become less and less viable operationally.”

He said the Rockhampton and Townsville facilities “could suffer the same fate” as Dinmore, which has a $131m payroll.

Mr Pratt said it was “starting to become a real possibility” that the processing plants would be shuttered long-term until the JobKeeper program ended.

“We’ve just go no chance of competing, which is why we’re starting to get a bit agitated and nervous,” he said.

“There’s no way we can service until March 31 with such inequity in the market.

“If we get to point where we’re losing our workforce and we simply can’t operate, there’s no way back from there.”

The company asked Josh Frydenberg for an exemption to create a more even playing field but on Wednesday the request was denied. “We said to Treasury somehow someway these people will be going on the Treasurer’s payroll, be it through JobKeeper or JobSeeker. He can choose which one,” Mr Pratt said.