Costa set on abolishing ‘ineffective’ mushroom levy
Horticultural powerhouse Costa is attempting to remove the mushroom industry’s compulsory levy it says is a waste of growers’ money.
AUSTRALIA’S biggest horticultural company is campaigning to abolish a mushroom levy it says has wasted $18 million of growers’ money on “ineffective marketing and administration”.
Costa will conduct an anonymous postal ballot in November to gauge the industry’s support for the levy, which was controversially doubled in 2014, principally to fund market research activities, to $4.32/kg of mushroom spawn. It has since been reduced to $4/kg following a review by the Australian Mushroom Growers’ Association.
The listed horticultural company said the compulsory levy meant growers have spent far more than other levy-paying categories but received the least return on their investment.
“Growers should be able to directly invest the levy money they currently pay in their own marketing rather than have their money wasted through the ineffective mushroom levy. As a levy payer and the largest mushroom grower, Costa is not content to watch our industry be destroyed,” a Costa statement said.
Costa spokesman Michael Toby said the company didn’t support the status quo. “When the levy was introduced almost 20 years ago we had 116 mushroom growers and now we have about 50. One of the key reasons cited for a levy is to maintain critical mass and that clearly hasn’t happened,” Mr Toby said.
He said Costa was also concerned that Hort Innovation, the government body appointed to administer horticultural levies, wasted money on administrative costs.
In 2018-19, grower levies tallied $4.8 million and more than $850,000 was spent on “service delivery”.
The AGMA supported the doubling of the levy in 2014 and has backed its continuation.
“If the levy were removed, we could see a reduction in mushroom consumption, reduced funds available for marketing, promotion and R & D, and a loss of significant projects,” Chairman Geoff Martin said.
Chris McLoghlin, who sources mushrooms for his business Fable Food Co, which makes alternative meat products for Coles and Woolworths, said the levy was a highly controversial issue within the industry.
“Costa wants to get rid of it because they pay for half of it. My sense personally is they’re not wrong, proof is in the pudding and the results would indicate it hasn’t been highly beneficial. Broader trends should be underpinning demand such as the rise of vegetarianism and lower prices, so really the industry should be in a sweet spot,” he said.
Market research indicates mushroom consumption in Australia has remained flat for almost two decades.
The confidential ballot will be independently audited by Link Market Services, with results likely in December.
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