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Back to NCP Review of the Uniform Trade Measurement Legislation Index 5. Effect of the Restriction on CompetitionThis section commences with a discussion on the Australian domestic meat market and then describes the impact of the restriction on each of the key stakeholder groups. The key stakeholder groups are meat sellers, consumers and governments. The impact is described in the form of a cost or benefit. Where possible, the value of the cost or benefit has been quantified. However, where quantification was not possible, the cost or benefit has been described in qualitative terms. 5.1 The Australian domestic meat market: The Australian meat industry produced approximately 3 624 000 tonnes of meat in 2000 for export and domestic markets. Beef made up the largest proportion of meat produced at 1 952 000 tonnes followed by chicken at 593 000 tonnes. The table below indicates that meat production increased over the period 1998 to 2000 by 150 000 tonnes. When comparing the 1998 meat production with 2000 meat production, lamb (+63 000t), chicken (+49 000t), beef (+41 000t) and pig (+5 000t) meat production increased, mutton production remained constant and veal (-8 000t) meat production decreased.
Source: Australian Bureau of Statistics8 Meat is produced for either export or domestic markets. The restriction on the sale of non-prepacked meat only applies to domestic sales of non-prepacked meat. The domestic market is made up of meat sellers and consumers. Meat sellers can be categorised as wholesalers and retailers, and retailers can be divided into fresh meat retailers (butchers) and supermarkets and grocery stores. The table below illustrates that in 1998-99 supermarkets and grocery stores held the greatest share of the domestic fresh meat market (excluding poultry and seafood) at 61.7%. Fresh meat retailers held a 37.8% share of the market.
Source: Australian Bureau of Statistics9 In the scoping study the consultant looked to the number of shops per person in Queensland to give a rough indication of the potential for competition in the market and found that there is generally a reasonable degree of competition. The following table is reproduced from the scoping study. The Regional Distribution of RetailersTotal Food Retailers
Supermarket and Grocery Retailers
Meat, Fish and Poultry Retailers
Source: Australian Bureau of Statistics The restriction on the sale of non-prepacked meat impacts largely on the sale of fresh meat10. The total income from the domestic sale of fresh meat in 1998-99 was $5 164 100 000. 11 This can be categorised as fresh meat ($3 511 900 000), fresh poultry ($965 300 000) and fresh seafood ($686 900 000)12. There are various types of meat which directly compete with each other such as beef, veal, mutton, lamb, pork, and game. Each of these types of meat offer a variety of cuts to consumers. For example, if a consumer intends to buy beef then the consumer may choose from silverside roast, rump steak, T-bone steak, chuck steak and corned silverside. Therefore, the consumer is provided with a large variety of fresh meat products. In the broader food market, there are a number of competing food products that give consumers a large number of meal options. The meal options range from eating out, purchasing `ready-to-eat' or `ready-to-cook' meals to purchasing a variety of fresh products and preparing a meal. Consumers are presented with large variety of food products, which compete with each other. In 1998-1999 the per capita consumption of meat in Australia decreased by 2.3% from the previous year to 71.6 kilograms13. These consumption figures do not include poultry or seafood. The per capita consumption of poultry in 1998-1999 was 30.8 kilograms and the per capita intake of seafood was 10.9 kilograms. Many factors may contribute to this decrease in consumption of meat such as trends toward vegetarianism, fast food options, religious beliefs and eating habits in general. The average weekly household expenditure on meat (including fish and seafood) was $1914 and the average expenditure on food and non-alcoholic beverages was $127 per week15 Therefore, approximately 15% of average household expenditure on food and non-alcoholic beverages in 1998-1999 was on meat. This illustrates that meat is a significant food item purchased regularly by consumers and on an annual basis represents an average household expenditure of approximately $988. In summary:
The restriction on the sale of non-prepacked meat impacts on any person selling meat that is not pre-packed. Meat sellers have a choice as to whether they sell meat packed in advance ready for sale or not, or to sell a mix of packed/non-prepacked meat products. Supermarkets and grocery stores typically sell the majority of their fresh red meat prepacked. A mix of fresh poultry is sold packed/non-prepacked and the majority of fresh fish is not prepacked. Therefore, the restriction does not impact on the majority16 of fresh meat products sold from supermarkets and grocery stores. Butchers do not tend to pre-pack a large proportion of the meat they sell. The reason can be linked to the marketing appeal of a butcher. This marketing appeal is that consumers can view a range of meat products and can interact with a butcher when deciding on a particular piece of meat, the mass of the meat or the quantity. Therefore, the restriction on the sale of non-prepacked meat impacts primarily on butchers. For the purposes of describing the costs and benefits, meat sellers are defined as persons selling non-prepacked meat. 5.2.1 Costs:Regulation results in costs to the community. Some of these costs are direct costs such as the compliance costs to business. There may also be other costs associated with any detrimental effects of regulation on competition in the market. The detrimental effects may manifest themselves in higher prices as a result of reduced price rivalry between competing suppliers as well as reduced incentive for innovation and misallocation of resources. Compliance costs: Under current arrangements, the compliance costs to meat sellers include the cost to mark meat at a price per kilogram and the costs to purchase, install and maintain a measuring instrument. The first cost involves the time and labour to mark meat at a price per kilogram. There must be underlying information and assumptions on which to base that price, which would include the price paid to the meat wholesaler, other costs and the market value of the meat product. The meat seller would need to work through these assumptions in determining a price per kilogram and label accordingly. If the restriction were removed, meat sellers would still need to go through a similar process to determine the price of the product for sale and label accordingly. Therefore, the cost to meat sellers of retaining the restriction is considered to be very small. The second compliance cost relates to the purchase, installation and maintenance of a weighing instrument. This is required to ensure that meat is sold at a price by reference to its mass. Consultation has indicated that a basic scale would cost approximately $450.00. If the restriction was removed, it is likely that a measuring instrument would continue to be an essential piece of equipment for a meat seller. Furthermore, it is unlikely that all meat would be sold per each if the restriction was lifted. For those products which would continue to be sold at a price per kilogram, a measuring instrument would be essential. Therefore, the overall compliance costs of retaining the restriction are considered to be very small. Advantaging competitors: The scoping study indicated that a potential consequence of the restriction is that supermarkets and grocery stores may have an advantage over other retailers such as butchers. This is because `pre-packed meat routinely sold in supermarkets and grocery stores has the unit price marked, but the total price is also shown and normally more prominently. This means that consumers know up-front the total price and number of pieces that will be provided. This is seen by butchers to attract customers at the expense of other retailers.'17 The Review Committee considered that this is a marketing issue and not a cost directly associated with the restriction. Some consumers prefer the `self-service' offered by supermarkets in the form of prepacked meat, while other consumers prefer the `personalised' service offered by butchers who cater for their specific demands. If butchers determine that a percentage of consumers are demanding pre-packed meats, then there is nothing preventing butchers from pre-packing meat to attract customers. Consultation has revealed that a number of butchers are now selling a mix of packed and non-prepacked meats. Butchers also have the option of labelling the price of the meat, provided that the mass and price per kilogram are also marked. For example, a butcher may decide to label whole legs of lamb with the total price, mass and price per kilogram. Or, the butcher may decide to label whole legs of lamb with the total price and mass, and indicate the price per kilogram in a statement not less than 10mm high on the relevant meat tray. These options were raised during consultation, however the peak industry association highlighted that there may be practical difficulties as there is a limit on the size and number of tickets that are used in a meat display window. The Review Committee also noted that the results of consultation indicated that supermarkets do sell non-prepacked meat, which is typically, fresh seafood and some fresh poultry. After weighing up all of the issues, the Review Committee concluded that the restriction does not impose costs on certain meat sellers and that this is a marketing issue. The Review Committee considered that the key issue was that prepacked meat is also subject to labelling restrictions. Prepacked articles must be clearly marked with the net weight of the goods contained in the package. If the packs are in random weight sizes, the price per kilogram and total price must also be marked. Therefore, like non-prepacked meat, basic information disclosure is provided to the consumer. Innovation cost: Consultation has indicated that the restriction discourages meat sellers from innovating and selling specialised meat products. The reason is that the production of specialised meat products involves extra labour costs and the addition of other food products, which translates into a significantly higher price per kilogram. As a result, consumers tend to avoid these products when sold per kilogram and meat sellers are discouraged from producing them. By way of example, Lenard's Pty Ltd advised that the restriction is holding back on their expansion into `ready-to-cook' red meats as it is believed that they would need to be sold by each to be commercially viable18. The range includes meat products such as lamb kiev, cullet kilpatrick, lamb rack and lamb cocktail balls. These `ready-to-cook' products would compete with a range of food products such as frozen meat products and would attract those consumers demanding easy `ready-to-cook' meat products. The application of the restriction to specialised meat products is a grey area and subject to various interpretations regarding when `meat' ceases to be meat for the purposes of this restriction. Generally, the restriction does not apply in the circumstances where a meat seller has added other food to meat and undertaken a substantial amount of labour to produce a specialised meat product. For example, the production of a lamb kiev or a beef wellington would involve adding other food and substantial labour. The restriction would not apply to such meat products. However, if the meat seller has merely crumbed or marinated beef, it would still be considered to be meat for the purposes of the restriction as it has not substantially changed. The scoping study indicated that there are various inconsistencies between the States and Territories in enforcement of the restriction, particularly in the area of specialised meat products19. These inconsistencies can create unnecessary uncertainty for meat sellers and may discourage a degree of innovation. There is an opposing argument that the restriction actually encourages innovation as it does not apply to specialised meat products. Therefore, meat sellers who produce specialised meat products can sell them either per kilogram or per each. However, the inconsistencies created during enforcement do create uncertainty. To this extent, retaining the restriction may discourage a level of innovation and result in a small innovation cost. Reducing the uncertainty would help to minimise such costs. Inequity: In Queensland, Victoria and the Northern Territory, poultry and fish are not interpreted as meat and therefore in those jurisdictions the restriction is not enforced against the sale of poultry and fish. There is diversity of opinion between jurisdictions as to whether the definition of meat in the legislation includes fish and poultry. However, putting the interpretation issue aside, there does not appear to be any underlying policy justification for excluding fish and poultry. Non-prepacked fish and poultry are sold readily by meat sellers and in many instances along side with red meat. Therefore, meat sellers in Queensland, Victoria and the Northern Territory are not competing on an equal platform and consumers are not guaranteed of a standard basis for comparison (ie price per kilogram) which simplifies the purchasing process of all fresh meat products. Consultation has revealed that the majority of basic poultry and fish products are sold at a price per kilogram in Queensland. For example, chicken breasts, chicken legs and fish fillets. However, some processed chicken products appear to be sold per each. Some of these products would be categorised as specialised meat products and not subject to the restriction (if it applied) such as chicken kiev. Other products such as crumbed chicken and chicken rissoles are sold per each, which can be viewed as giving these meat sellers an advantage over red meat sellers who are required to price similar products at a price per kilogram. The number of poultry and fish products marketed this way is small. Out of the 26 meat sellers consulted in Queensland, only 3 were selling crumbed chicken per each and 2 were selling mini roasts per each. On this basis, it is likely that the relative competitive disadvantage faced by red meat sellers because of the restriction is small. This situation is isolated to Queensland. Consultation also indicated that fresh meat sellers are being treated differently from other food sellers who do not have to comply with a similar restriction. Other fresh food products include fruit and vegetables and bread. Sellers of fruit and vegetables, which are not pre-packed, do not face a similar restriction. However, fruit and vegetables can be differentiated from meat as it can be closely scrutinised by consumers and scales are available to weigh products. Customer demand forces many retailers to sell fruit and vegetables by weight and there would be increased cost to sellers if they were to count every piece of fruit and vegetables upon sale. Bare loaves of bread are not subject to a similar restriction and consumers would face similar difficulties as faced when purchasing meat, as bread can not be closely scrutinised. However, the fact that there is not uniform restrictions across all fresh food products does not result in a cost to meat sellers as fruit, vegetables and bread are not competing products. Pre-packed articles are exempt from the definition of meat and as such do not compete directly with meat. Prepacked articles must be clearly marked with a statement of the measurement of article. Therefore, consumers are able to make an assessment regarding price/weight ratio and make comparisons. While it is acknowledged that there is not uniformity in food restrictions, the Review Committee considers that any consequential cost incurred by meat sellers because of the restriction is insignificant. 5.2.2 Benefits:Equal playing field: The restriction benefits meat sellers overall by providing an equal platform from which all meat sellers can trade and compete. Without the restriction, some meat sellers may find it hard to compete effectively with other meat sellers. For example, consider a situation where a meat seller is selling rump steak at $8.00/kg. If the meat seller determines that a competitor is selling rump steak at $7.00/kg, the meat seller may reduce his/her price to remain competitive. If, however, the competitor is selling rump steak at $4.00 each, then it becomes more difficult for the meat seller to compete directly on price alone as the mass of the competitor's rump steak is not easily ascertainable. Therefore, the restriction assists in creating an equal platform from which all meat sellers can trade. The restriction also increases consumer confidence given that there is a standard basis for comparison amongst meat sellers which encourages consumers to transact in the market. Of the 46 meat sellers consulted, 12 (26%) identified that the restriction generates benefits for their business and the most common benefit stated was that the restriction creates a standard or equal playing field for selling meat which is fair. 54% of meat sellers consulted indicated that the restriction should not be removed, 35% indicated that the restriction should be removed and 11% did not indicate a preference. However, the peak industry association has lobbied on behalf of its members for the removal of the restriction. Therefore, weighing up these results the Review Committee considers that the provision of an equal platform is only a very small benefit to some meat sellers. Minimises competitors engaging in deceptive practices: The restriction also acts to minimise deceptive practices that competitors may engage in to gain an unfair advantage. Such deceptive practices include displaying a certain size product for a fixed price by each and then substituting a smaller product upon purchase, or decreasing the mass of the product over time while maintaining a fixed price. Such practices not only impact on consumers, but also make it hard for meat sellers to complete fairly on an equal platform. There is limited evidence to indicate that these practices would be a substantial problem. However, consultation has revealed that this is one of the areas of concern to consumer organisations and a number of meat sellers. To the extent that the restriction provides some restraint on deceptive practices by unscrupulous meat sellers, its retention would provide a small benefit to reputable meat sellers. Minimises transaction costs: The basic per kilogram pricing minimises transaction costs. A price that represents per each is a superadded stage to the basic per kilogram pricing as it requires further effort and calculation on the part of the meat seller. For example, consultation with meat sellers indicates that the yield of meat products sold per each would have to be carefully monitored and products would need to be standardised where possible. When calculating the price, the meat seller would need to consider these preparation and labour costs as well as the price paid to the wholesaler. Consultation also indicated that some meat sellers would be concerned if wholesalers commenced selling per each. Some meat sellers indicated that they would not purchase meat sold per each from wholesalers, while others indicated that they would have to work out the price per kilogram. This extra effort and calculation increases transaction costs associated with the sale and purchase of meats. Meat sellers may also find it hard to convince some consumers that they are providing good value for money when competitors use various pricing methods. Effective marketing could overcome this problem, however it would also increase transaction costs. To the extent that the current restriction minimises these transaction costs for meat sellers, its retention is likely to represent a benefit to meat sellers. However, any benefit is likely to be limited by the fact that most sellers are only likely to undertake the additional effort and cost of selling by each if they believe it will be outweighed by improved sales and revenue. Therefore, any benefits are likely to be very small. Meat is a significant food item purchased regularly by consumers and the average annual expenditure on meat is approximately $988 per household. Consumers are presented with a variety of options when deciding to purchase meat. The first option is where to purchase meat. It is readily available from supermarkets, grocery stores and butchers and some of the factors impacting on where to purchase is the price, quality of product, range of products available, service received, standard of the outlet and its presentation, convenience and location. The next option is whether to purchase fresh, frozen, canned, bottled or processed meat. If a consumer decides to purchase fresh meat there are a large variety of types of meat available that have a mixture of cuts. Consumers are also presented with the option of purchasing either prepacked or non-prepacked meat. 5.3.1 Costs:Disadvantages consumers who prefer to buy per each: Consultation has revealed that the restriction may disadvantage consumers who have a fixed monetary amount they wish to spend on a meal or meal component. A mandatory reference to a price per kilogram (ie rump steak $7.00/kg) does not enable a consumer to work out the exact price and may set an artificially high price impression in the consumer's mind as opposed to a price per each. The reference to a price per kilogram also does not permit a consumer to quickly work out how many slices or pieces of meat there are in a kilogram. This may lead to consumer embarrassment if items have to be taken out of the purchase order. Consumers may also be reluctant to purchase whole cuts of meat, for example, legs of lamb when displayed on a per kilogram basis because the actual price is not easily ascertainable while on display. The National Meat Association of Australia has advised that a 1993 survey of 3,195 customers in New South Wales indicated that 51% of customers surveyed bought `per each', 23% purchased `per gram' and 26% purchased `per kilogram'. It was submitted that these results confirm the belief that consumer preference has shifted from that which might have existed in the past. Supporting this result is a submission received from Lenard's Pty Ltd, which sells meat products per each. Lenard's Pty Ltd have not received any complaints from consumers about buying meat per each and served in excess of 9,000,000 consumers last year. However, it is not clear from these results if consumers prefer purchasing all meat products per each or particular meat products (ie. specialised meat products). There is diversity of opinion regarding consumer preference for per kilogram pricing. Anecdotal evidence provided during consultation suggests that consumers like being able to make price comparisons by weight when purchasing meat. While some consumers may like to purchase packaged meat or portions of meat labelled by unit price, they also appreciate being able to compare the price/weight ratio. It has also been suggested that the fact that Queensland poultry and fish retailers largely sell at a price per kilogram without having to do so is striking evidence of consumer demand for this type of method of sale. It was also highlighted during consultation that consumers are demanding more information about food products, which supports the continued requirement for a price per kilogram description. Examples include public support for the new labelling requirements regarding genetically modified organisms and a recently initiated inquiry into providing price per weight information on the shelf labels of supermarket general grocery lines. There have also been calls from consumer organisations for meat to be graded as it is difficult for consumers to judge the quality of meat before purchase. For example, CHOICE20 recently called for a national standard for beef, which should be overseen by the Australian New Zealand Food Authority to ensure that it is enforceable and separate from industry. If the restriction was removed, consultation has indicated that the majority of basic meat products would continue to be sold at a price per kilogram. It is likely that butchers would find it less cost effective and more difficult to standardise or manage the size of a yield because of the lack of potential to cut meat to a standard size without wasting considerable portions of meat in some instances. It is likely that more processed products would be sold per each. Some of these processed products would be classified as specialised meat products, which can currently be priced per each. The remaining products would be items such as rissoles, patties and crumbed product, which currently must be priced per kilogram. It is likely that some meat sellers would commence selling these products per each. However, in terms of the total market for meat, the removal of the restriction is likely to lead to only a small change from the current selling methods. Even then, a proportion of consumers would continue to be dissatisfied with the price per kilogram description in certain circumstances, for example when buying to a predetermined $ value. Therefore, retaining the restriction would represent only a small cost to these consumers. Reduces the range of meat products: As outlined earlier (section 5.2.1), the inconsistencies surrounding specialised meat products creates unnecessary uncertainty for meat sellers and may discourage a degree of innovation. To the extent that this uncertainty reduces the range of specialised meat products available, there would be a small negative impact on consumers. 5.3.2 Benefits:Minimises transaction costs through mandatory information disclosure: Regulation can give benefits to the community or a certain class within the community. The restriction provides benefits to meat consumers by minimising their transaction costs through mandatory information disclosure. In a completely free market, consumers may find it costly to obtain relevant, accurate and reliable information on the quality and quantity of meat sold by a meat seller. For example, the health and safety related prohibition on consumers handling meat before purchase makes it extremely hard to make an assessment regarding the quality and quantity of the meat. This differentiates meat from other staple food such as fruit and vegetables that can be closely scrutinised by consumers through smell and touch, and in some cases, sampled. If the meat seller uses another pricing method such as a price per item, consumers may find it difficult to assess the relative value for money of the various meat products on display. This situation becomes even more difficult if a consumer tries to make an assessment of value for money between a number of meat sellers. For example, it becomes difficult for a consumer to determine value for money between one meat seller selling rump steak at $7.00/kg and another meat seller selling rump steak at $4.00 per steak. When viewing the products, the consumer's perception may be distorted due to the presentation of the steak. Consumers can overcome information failures by acquiring information about meat products. However, as meat is purchased regularly, consumers may face high transaction costs in trying to determine this information for themselves. This can lead to an inefficient market outcome and public dissatisfaction. The restriction requires the disclosure of information in the form of a price per kilogram description and the requirement to sell by a reference to the product's mass. This description can be used as a point of reference to compare different meat products. It also enables consumers to compare between similar products offered by meat sellers and between prepacked/non prepacked meat. For example, if a consumer wishes to purchase rump steak the consumer can compare the price per kilogram advertised at a butcher with other butchers and/or with prepacked meat at a supermarket. Consultation has indicated that consumers may also find the description helpful to determine whether a price is particularly cheap. Therefore, the restriction reduces transaction costs for consumers and enables them to shop for meat with confidence knowing that there is a standard basis for comparison amongst meat sellers. As discussed in section 5.2, removing the restriction could increase transaction costs for meat sellers. These transaction costs relate to the further effort and calculation of per each pricing and the possibility of increased marketing costs to convince consumers that their products are providing value for money. Ultimately, the increased transaction costs could be passed onto consumers in the form of higher prices for products sold per each. Therefore, the basic per kilogram pricing minimises these transaction costs. In determining the extent of the benefit, the Review Committee noted the consultation results from consumer organisations and some industry representatives, which indicated that the mandatory information disclosure based on a price per kilogram description is fundamental. The Review Committee also acknowledged that one of the eight fundamental consumer rights adopted by the United Nations is: "the right to be informed - the right to be given the facts and information you need to make your own choices". Therefore, the Review Committee considered that the minimisation of transaction costs through mandatory information disclosure generates a small to moderate benefit to some consumers. Indication of value for money: It was indicated during consultation that the more expensive lines sell much more readily when priced per each as consumers tend to avoid the products when priced per kilogram. The price per kilogram can be viewed as giving consumers an indication of value for money. For example, if chicken breast is sold at $10.00/kg and crumbed chicken breast is sold at $12.00/kg, then consumers can make an assessment of the value of the products. The price per kilogram description is more transparent than per each pricing. For example, consider a consumer comparing chicken breast at $10.00/kg with pieces of crumbed chicken at $3 each. However, consultation also highlighted that the price per kilogram will not necessarily provide consumers with a good measure of value for money. The amount of fat and/or bones may typically vary in certain meat products. A meat product may be sold boneless, semi-boned or bone-in. For example, meat seller "A" may sell a leg of lamb for $12.99/kg whereas meat seller "B" may sell a leg of lamb for $6.99/kg. Both meat sellers ticket the product as "leg of lamb". However, the difference between the meat products is that meat seller "A"s product is boneless whereas meat seller "B"s product is semi boned. Quite often a consumer cannot visually distinguish the two products and would therefore prefer to purchase the cheaper product (with more bone content) as a measure of value for money. It was also raised during consultation that not only does the price per kilogram description make it simple to compare prices between meat sellers, it also informs consumers when the price of meat is particularly cheap and therefore good value for money. After weighing up these issues, the Review Committee considered that the price per kilogram description provides a very small benefit to consumers in determining value for money. Minimises deceptive practices: The restriction also protects consumers from deceptive practices. Consultation has revealed that some meat sellers could engage in practices such as displaying a certain size product for a fixed price by each and then substituting a smaller product upon purchase. The true value of a product could also be hidden from the consumer by maintaining a set price for a product and decreasing the mass of the product over time. Hence, there could be an increase in the price per kilogram at any time without the consumer being aware of the price rise. Another practice is selling small legs of lamb, roasts etc at the same price as larger cuts of meat in other stores. Consumer organisations have indicated that disputes would be difficult to resolve, because of the impossibility of returning the product. There is little evidence of such practices occurring in Western Australia and New Zealand where meat sellers are not subject to a similar restriction. However, consultation has revealed that this is one of the areas of concern to consumer organisations and a number of meat sellers. Overall, retaining the restriction is considered to represent a small benefit to consumers through its role in inhibiting deceptive practices. Advantages consumers who prefer to buy at `$/kg': Consultation has revealed that the restriction impacts positively on those consumers who wish to buy to a recipe and require meat to be weighed to recipe specifications. Anecdotal evidence provided during consultation also suggests that consumers like being able to make price comparisons by weight when purchasing meat and most other processed foods. While some consumers may like to purchase packaged meat or portions of meat labelled by unit price, they also appreciate being able to compare the price/weight ratio. As noted in section 5.3.1, the exact number of consumers that would prefer this method of sale is unclear. If the restriction was removed, it is likely that the majority of meat would continue to be sold at a price per kilogram due to the inherent difficulties in managing the size of yields as discussed in section 4.2. Therefore, the restriction only generates a small benefit for these consumers by guaranteeing that non-prepacked meat is sold at a price per kilogram. The Uniform Trade Measurement Legislation is administered by the following government agencies throughout Australia:
These agencies engage in activities to ensure that meat sellers are complying with the restriction. The enforcement costs are those incurred by the relevant government agencies in having trade measurement officers/inspectors randomly visit a range of meat sellers to determine compliance with the restriction. For example, statistics from New South Wales indicate that during the 2000/2001 financial year, inspectors conducted 546 inspections of meat retailers (which included supermarkets). This would equate to $35,000 in inspectors time devoted to this restriction. Statistics from South Australia indicate that officers visited 165 retail butcher's premises in 2001. Consultation with government agencies has indicated that the cost of administering the restriction is very small. If the restriction was removed, trade measurement officers would continue to randomly visit a range of meat sellers to check trading practices. The costs and benefits can be summarised as follows:
Therefore, the overall assessment is that the restriction generates a small net benefit to the community. 8 Australian Bureau of Statistics, Livestock and Livestock Products 7113.0 1999-00 9 Australian Bureau of Statistics, Retail Industry, Commodity Sales 8624.0 1998-99 10 It is acknowledged that the restriction applies to cooked meat which is produced for sale elsewhere, however it is estimated that only a small proportion of meat is sold this way. 11 Australian Bureau of Statistics, Retail Industry, Commodity Sales 8624.0 1998-99 12 Please note that the ABS indicates that the sales from fresh seafood has a relative standard error of between 25% and 50% and should be used with caution. 13 Australian Bureau of Statistics, Apparent Consumption of Foodstuffs, 4306.0 1998-99 14 Australian Bureau of Statistics, Household Expenditure Survey 6535.0 1998-99 16 Income from fresh meat sales in 1998-99 were $2 165 800 000 (red meat), $711 300 000 (poultry) and $191 600 000 (seafood). See Australian Bureau of Statistics, Retail Industry, Commodity Sales, 8624.0 1998-99. 17 See page 20 of the Scoping Study. 20 Choice, `Food: Food Opinion Column: A load of old beef?', `Any old beef? No guarantee of domestic beef quality, says Choice' www.choice.com.au. Back to NCP Review of the Uniform Trade Measurement Legislation Index |
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© Commonwealth of Australia 2000 Ministerial Council on Consumer Affairs www.consumer.gov.au
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