VANGUARD - Expressing the viewpoint of the Communist Party of Australia (Marxist-Leninist)
For National Independence and Socialism • www.cpaml.org
Duncan B
Farmer organisations are upset that Treasurer Joe Hockey recently rubber-stamped the take-over of Australia’s largest manufacturer of ham, bacon and smallgoods, Primo Australia, by Brazilian agri-giant JBS in a $1.45 billion sale.
This leaves Australia in a situation where JBS and the joint venture between US-owned Cargill and Teys control half of Australia’s meat processing.
Primo started out in a small way in 1985, but grew to include five manufacturing plants in Australia and New Zealand, employing more than 4,000 people. Along the way, Primo took over some of its competitors such as Hans Continental Smallgoods. Primo’s main rival is Don Smallgoods.
Australia’s cured meats and smallgoods market is worth $3 billion and includes 194 businesses employing more than 8,200 people, so it is an important agriculture-based industry in Australia. Industry revenue is forecast to grow by 2.3% in 2014-15. The smallgoods industry is concentrated in the eastern Australia states with Victoria having 34.6% of the industry total.
JBS Global broke into the Australian market in 2007, with its acquisition of Swift Foods, and has since purchased other companies including Tasman Meats. It has revenue of $US 41 billion per year, more than 300 production facilities world-wide and more than 185,000 employees.
JBS Australia employs approximately 8,500 employees and is the country’s largest beef processor and one of the largest lamb processors. The take-over of Primo will allow JBS to diversify into the pork market, in particular Asian markets such as China and Vietnam which are large consumers of pork.
The Victorian Farmers Federation livestock president said farmers were losing out as global meat processing giants took over an “ever greater share of our industry.”
“You only have to look at the massive growth in processor margins versus the almost stagnant pricing we face in the saleyards,” he said.
NSW Farmers cattle committee chairman said the Government and competition watchdog seemed “either powerless or unwilling to block larger processors’ creeping acquisitions of smaller players… The JBS takeover of Primo is an example of a major meat processor consuming yet another small competitor,” he said.
Some National Party senators are seeking an inquiry into the matter.