The proposed acquisition raises a number of concerns for AFSA and our directly-affected members—small and medium-scale pastured pig farmers in Victoria. The concerns centre around the certainty of continued access for service kills and a lack of choice, reflective of a lack of competition, in the state for small-scale farmers accessing service kills.
At a general level, multinational corporations’ increasing acquisition of abattoirs, and market imperatives that prioritise consolidation of assets and tend towards vertical integration, have the effect of excluding small-scale farmers. In Victoria, with few remaining abattoirs left in the state for small- and medium-scale farmers, consolidation increases uncertainty and further narrows the already dwindling options for service kills to the extent that small-scale farming operations may become unviable. For example, in Victoria there is only one abattoir that services small-scale poultry farmers at the current time.[1]
Vertical integration in corporate agriculture directly excludes farmers from accessing service kills, such is the case at Rivalea’s plant in Corowa, Victoria. As a result, small-scale farmers are forced to utilise alternate abattoirs. Lack of competition between locally-owned abattoirs in the territorial market increases the risk of accessing service kills further afield becoming financially prohibitive, due to increases in costs such as transport (see Questions 4–5).
For an export-focused, multinational organisation like JBS, combined with Riverlea, increases their ability to discontinue service kills at any time which would stall small-scale farmers’ operations. JBS’ scope and ambit is anomalous to small-scale farmers’ territorial market, which is, at most, a 150km radius.
Where small-scale farmers may continue to use abattoirs such as Diamond Valley Pork (DVP), its proposed acquisition by JBS raises concerns about scheduling, pricing, and quality. Firstly, commercial pressures on abattoirs to take larger consignments of uniform animals means machinery are purpose-built for these. As a result, larger consignments are prioritised in scheduling and other operations. Secondly, an acquisition by a multinational corporation like JBS with known power and disproportionate ownership of meat processing globally increases susceptibility to change in pricing (see Questions 4, 7).[2] Thirdly, AFSA members already face carcass quality issues when non-uniform sized, heritage breed animals are sent down a high-speed mechanised line designed for the homogeneity of industrial pigs, and JBS’s stated interest in growth will further exacerbate this problem. These concerns are borne out in the rare- and heritage-breed livestock returning as damaged carcasses.
The proposed acquisition further entrenches small-scale farmers’ lack of choice regarding abattoirs, which reflects the ongoing loss of local abattoirs that are genuinely committed to environmental considerations and animal welfare.
Other concerns include cyber-hacking, and climate priorities. Cyber hacking forced a shutdown of 47 locations in Australia, and other sites in US and Canada, and resulted in payment of a ransom of AUD$14.6 million.
We want to see a flourishing of more small farms with increased autonomy, competition, and care for the land. JBS services (and owns) large-scale industrial agriculture globally, and directly affects farmers’ autonomy, aggressively seeks acquisitions that diminish competition, and externalises its environmental and social impacts to everyone’s detriment but its shareholders. We want to nourish our community of eaters and see a renaissance of rural and regional communities, which will not be possible with the continued consolidation of control of our food and agriculture systems in too few hands.
Read our full submission to the ACCC here.
[1] Star Poultry in Keysborough.
[2] https://equitablegrowth.org/competitive-edge-big-ags-monopsony-problem-how-market-dominance-harms-u-s-workers-and-consumers/
