Nationals want beefed-up inquiry into high retail meat prices

Cattle and sheep prices have plunged while beef and lamb prices have barely budged. Farmers and consumers want to know why.

Sheep prices have plummeted this year.

The heads of major supermarkets should be dragged before a public inquiry and ordered to explain why customers are paying so much for lamb and beef while sheep and cattle prices are falling, David Littleproud says.

The Nationals leader has called for the Albanese government to ask the Australian Competition & Consumer Commission to launch the snap inquiry into meat pricing and argues the government’s existing Food and Grocery Code inquiry would be too broad and take too long to be effective.

Cattle and sheep prices have fallen considerably over the past year but retail prices for beef and lamb did not drop until recently and have only gone down by between 6 and 12 per cent while livestock prices have halved.

Retailers and meat processors say other input costs and forward contracting have contributed to the lag and lower price movement.

Mr Littleproud said the government’s other reviews would not be effective at investigating the issue.

“(An ACCC review) would compel the supermarkets to turn up and give evidence,” Mr Littleproud said. “That is the power that should be used and the fact that (the government) hasn’t done it and they’re trying to smokescreen this with other review mechanisms that actually don’t go to the heart of the problem is either covering the fire for the supermarkets or they simply don’t understand their own processes.”

Agriculture Minister Murray Watt, who has called for supermarkets to move on the issue, has said the government’s review into the Food and Grocery Code, which regulates retailer and supplier interactions, would address the problem and could result in ­increased penalties.

Analysis of prices for processor weight stock shows cattle prices, which hit record highs in the past few years, have dropped from 462c a kilogram to 204c a kilogram in the past year, while the price of heavy lambs has dropped from 821c a kilogram to 501c a kilogram. Meanwhile, retail beef and lamb prices have dropped by 6.1 per cent and 12.7 per cent respectively.

State agricultural ministers have called for the issue to be included in the forthcoming commonwealth competition review.

Allan Fels, the former head of the ACCC, has backed calls for the organisation to conduct an inquiry into the matter, saying it would be done “quicker and better” than the government’s proposed Food and Grocery Code review.

Professor Fels said his ACTU-backed review into price gouging would also look at the issue. “I think the situation needs an investigation by the ACCC upon referral by the minister,” he said. ‘We know that lamb prices for farmers have dropped extremely heavily a considerable time ago but retail prices did not fall until recently.

“What’s needed is to look at the whole supply chain, not just retailers but the person in the middle, processors and abattoirs et cetera.”

Processors have claimed the lower price they pay for livestock is offset by higher input costs for things like wages and electricity.

“The ACCC should probe whether it is just offsetting costs or whether an extra margin is being taken,” Professor Fels said.

Woolworths last week announced it would drop its meat prices by 20 per cent, which Professor Fels said was likely in response to consumer and farmer frustration.

Patrick Hutchinson, the head of the Australian Meat Industry Council, disputed claims of price gouging and said politicians were making a problem out of an issue that was not questioned when prices were beneficial for farmers. He said any review should aim to lessen the effects of price volatility across the whole supply chain.

“I think it should be less about saying ‘let’s have a run at supermarkets’ and more of a broader discussion about how these markets are operating, what influences the volatility, how we can manage that volatility for all sides,” Mr Hutchinson said.

“Then we can look at what interventions can be made from a business level, an investment level and a government level.”