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STANDING COMMITTEE ON RURAL AND REGIONAL AFFAIRS AND TRANSPORT
09/07/2008
Meat marketing

CHAIR —Welcome. I remind senators that the Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. Officers are also reminded that any claim that it would be contrary to the public interest to answer a question must be made by a minister and should be accompanied by a statement setting out the basis for the claim. We have a senator with us via teleconference as well. Good morning, Senator McGauran.

Senator McGAURAN —I am attending from the so-called offending state.

CHAIR —I will invite you to make a brief opening statement and then the committee will ask questions. Ms Paliskis-Bessell, do you wish to make an opening statement?

Ms Paliskis-Bessell —Just to reiterate some of the points that were made in our submission. In Western Australia the Western Australian Meat Industry Authority is responsible for regulating lamb and hogget branding in this state, and the title of the legislation is the Western Australian Meat Industry Authority Act 1976 and the Western Australian Meat Industry Regulations 1985. The legislation specifies that it is a function of the authority to implement schemes and practices for the branding of any carcass or meat. The definition of ‘lamb’ is actually a prescribed product—is that right—in this state and the authority is responsible for ensuring or more regulating the lamb branding in this state to ensure that all product produced in this state defined as lamb must be proved to be lamb and branded accordingly.

CHAIR —Mr Saunders or Mr Donaldson, do you wish to make a brief opening statement before we go to questions?

Mr Saunders —Just to reiterate what Renata said, that in WA, unless the animal is lamb and determined as lamb at the point of slaughter, you cannot sell it as anything else. So mutton and hogget cannot be sold as lamb here.

CHAIR —We will go to questions. I think you have probably followed where the committee has been going with this hearing.

Senator SIEWERT —I want to follow up on the comments you made just then about ensuring that lamb that is sold as lamb is lamb. Could you for the record just tell us how you do that, because we have had evidence from other states about getting someone to check the mouth.

Mr Saunders —In WA the regulations require that every sheep be mouthed and that is done under the supervision of an inspector and only the carcasses that correspond with the requirements for lamb can have the brand applied.

Senator SIEWERT —Can you tell us at what stage that is done and how you ensure that the carcass is the same carcass that came in—that you actually certified?

Mr Saunders —It is done before the head is taken from the body. Most works have a system of identifying the carcasses. If you had a mutton carcass they might put two cuts on the back leg or on a hogget one cut. So, generally speaking, the lambs will be anything that has not been marked. The system differs from works to works, but it is quite a rigorous system.

Senator SIEWERT —In some of the evidence that we have heard previously there is stuff put on the hook and it is not the carcasses that are actually rolled until the end of the process, so I was just wondering how WA does this.

Mr Saunders —That is correct: you do not roll the carcasses until they have gone through the production chain. Because you have fairly rigorous determination of the various lines of animals coming in and mouthing of the carcasses, with an identification cut being put on the carcass, it is fairly hard to rort the system.

Senator SIEWERT —That is what we are trying to find out. Some of the abattoirs do not seem to actually mark the carcass until the very end, but you mark the carcass at the beginning.

Mr Saunders —Yes. Generally the person that is doing the mouthing will just do it.

Ms Paliskis-Bessell —It would be very difficult to prove that a product is lamb if the carcass is cut, for example, at the end of the production chain when the head is nowhere near the carcass.

Senator SIEWERT —That is what I was trying to find out—how WA actually made sure that there was that continuity through the process.

Ms Paliskis-Bessell —It is done just before the point where the head is taken off and that is when the animal is mouthed.

CHAIR —So every sheep is mouthed. Has that always been the case in WA?

Mr Saunders —Yes, since our legislation has been in. The only exception might be if you are doing a big line of mutton; you would not mouth them, but then no brands would be applied to that consignment.

CHAIR —How long have we had the legislation in Western Australia?

Mr Saunders —I think that particular legislation has been in since 1985, under our act, but prior to that we had the lamb board, which had a compulsory acquisition of lamb.

CHAIR —I should not be asking hypotheticals but, from a regulatory point of view, if that requirement to mouth every lamb or every sheep was removed, what do you reckon that would lead to?

Ms Paliskis-Bessell —Absolute disaster!

Mr Saunders —I think it would probably be exploited.

Senator O’BRIEN —I am interested to know the history of enforcement of your legislation. We have heard some evidence about rigorous enforcement of the Western Australian legislation. Can you tell us more about that, please?

Mr Saunders —Yes, that is correct. We are also helped over here in that, because all lambs have to be branded, that brand is also recognised as the health brand. If you start to tinker around with that, it actually becomes the criminal offence of fraud and we have quite close working relationships with the police department that enable us to bring another regulator in. But, essentially, we believe that at Western Australian works now there are very few problems. You might get the odd problem at a retail level of someone trying to sell a leg of mutton as lamb, but essentially we do not believe that there are any significant issues out there. In the past, there were some fairly big ones. With the powers of our regulations we were able to detect those offences and take appropriate action against the offenders.

Senator O’BRIEN —What was that?

Mr Saunders —There are a couple of things you can do. Obviously you can take legal action against them for the various offences under the act, but, in cases where there were significant non-compliance issues, we would withdraw the brands.

Ms Paliskis-Bessell —What about the issue of fraud? There was jailing involved.

Mr Saunders —Yes. In one particular case where fraud was involved, we did a joint investigation with the police and the proprietor of the abattoir did some time in jail.

Ms Paliskis-Bessell —How long?

Mr Saunders —I cannot remember the exact time. I think the person concerned got between one and two years for his offences.

Ms Paliskis-Bessell —Jail?

CHAIR —That is a good deterrent.

Senator SIEWERT —I am sorry; when was that again?

Mr Saunders —With the biggest case we had, the proprietor of the works got, I think, between one and two years jail when he was found guilty.

Senator HEFFERNAN —On what scale was he found guilty? Was he the operator or the inspector?

Mr Saunders —He was the owner or the managing director of the company that owned the abattoir.

Senator HEFFERNAN —That would work really well.

Ms Paliskis-Bessell —It did work really well.

Senator O’BRIEN —You said that the identification requires mouth checking under the supervision of an inspector—in all cases?

Mr Saunders —Yes.

Senator O’BRIEN —What was happening in the circumstance that led to the prosecution for fraud and jailing of the company owner or managing director?

Mr Saunders —In that particular circumstance, the abattoir operators had gained illegal access to the inspectors’ lamb brand. At load-out time, they used to put some of the better mutton to one side and, when the inspectors were not on site, they were roller branding the mutton with the lamb brand. We were able to pick that up because of the markings on the back legs when we did an inspection at a city boning room.

Senator HEFFERNAN —So there was a bit of likeable rogue behaviour.

Senator FISHER —What is likeable about it?

Senator HEFFERNAN —Well, unlikeable rogue behaviour. I guess once you break the body up, as you say—for instance, strip loin—you could describe good mutton as lamb strip loin and no-one will know the difference.

Mr Saunders —With the way the brand is put on the carcass, you can pick up most of the cuts. The only ones you cannot really pick up are fillets.

Senator HEFFERNAN —That is right. That is the point I was making. By and large, it is a reasonable speed camera in the abattoir system, the system you use, and I congratulate you on it.

Mr Saunders —Thank you.

Ms Paliskis-Bessell —Very much so.

Senator HEFFERNAN —We have to get them to do that over here.

Senator O’BRIEN —Did the discovery require someone tipping you off, or was it just the system of marking and identification that allowed you to find the fraud?

Mr Saunders —I guess, like all regulators, we do rely on feedback from the industry at times and, in this particular case, we got some feedback. But I think it was the basics of the system itself that gave us the evidence to take action against the person. In other instances, we have picked up irregularities without information. So it is a combination of those things that enables you to regulate the industry.

Senator O’BRIEN —Could you give us any indication of the cost to the taxpayer and/or the industry of the system of regulation that applies to lamb?

Mr Saunders —I do not believe it to be great, because it is something the abattoirs do as part of their daily operations and we are only running with one compliance officer.

Ms Paliskis-Bessell —So, in terms of the cost to the taxpayer in this state, I would say that a generous figure would be $100,000 a year. In terms of the cost to the industry, given that they themselves already have quality assurance systems in place within their plant that are audited by the likes of AUS-MEAT, the health department and us, the lamb identification component of that system is quite small. So I would say that the cost to industry would be negligible. The flip side of that is that the assurance that we are able to provide our consumer that whatever lamb product they pick up is in fact lamb is well worth the investment that is made at the taxpayer level and at the industry level.

Senator HEFFERNAN —Good on you.

Senator O’BRIEN —Is there any significant importation of lamb from other states into Western Australia?

Mr Saunders —Yes, and probably more so now that some of the supermarket chains are going to more centralised buying. It certainly used to happen before, dependent upon seasonal trends. Our regulations also require that any lamb that is brought into the state is branded in accordance with our regs.

Senator HEFFERNAN —Killed under that supervision or killed under Rafferty’s rules in the east?

Mr Saunders —I am not sure that we can comment on that.

Senator SIEWERT —Could you go back? When it is brought into the state, how do you deal with it?

Mr Saunders —I suppose about 10 years ago, most of the product came over in carcass form and it could not be brought into the state unless it had a certificate from the meat inspection from the plant concerned verifying that it was lamb. If it did not have a lamb brand on it, it used to be branded at the main receival point. That has changed a bit in recent times with more boxed product coming over, but we work closely with the major supermarkets to ensure that, if they do bring it over, it comes from a plant that is using lamb branding. There have been some recent incidents—when unbranded legs have come over to WA, they have been withdrawn from the market.

CHAIR —What state have they come from? Anywhere in particular?

Mr Saunders —They were coming through Coles, I think it was, from Victoria.

Senator HEFFERNAN —Why am I not surprised?

Senator SIEWERT —So lamb is only imported into WA if you can guarantee that it is lamb?

Mr Saunders —Yes, basically.

CHAIR —Since that misdemeanour from Coles in Victoria, has lamb from Victoria via Coles come into WA since then?

Mr Saunders —Yes. Generally, with the eastern states stuff, I do not believe it is so much a matter of animals that are not lamb coming over; it is where someone in the dispatch side over there has not understood our regulations.

Senator SIEWERT —So how do you know that substitution is not going on in the lamb that is coming into WA?

Mr Saunders —We have seen nothing to suggest that there is substitution there. If the product coming in has the lamb brand on it, we have to respect the fact that it has gone through an inspection and certification procedure in the east. If we find product that is unbranded here, we give the person that has brought it in the opportunity to provide appropriate identification to us and then they have the option of either rebranding it, if they want, or in many cases they elect to take it back or downgrade it to mutton.

Senator O’BRIEN —If it were established to your authority’s satisfaction that meat had been branded as lamb and that it was subsequently shown that the works were applying the lamb brand to hogget and mutton, would that create a fraud prosecution?

Mr Saunders —I do not think so—that is off the top of my head—because I think the offence would have to take place in Western Australia.

Ms Paliskis-Bessell —So therefore it would be the responsibility of the particular state of origin authority to then go down the path of prosecution.

Mr Saunders —I think that if the relevant authorities or jurisdictions in the eastern states brought that to our attention we could have the product withdrawn from sale here.

Senator HEFFERNAN —So you could overcome all of those queries and puzzles if everyone applied the same set of standards to their abattoirs and meat slaughter. We had Herd in here the other day—he is on the Meat Safe set-up in Victoria that is supposed to enforce the correct branding of lamb—giving evidence that he did not actually believe in what they were meant to enforce. He did not think there should be such a thing as lamb. His attitude was that it ought to be: if it tastes like lamb and it looks like lamb, you just call it lamb regardless of whether it is buffalo.

Ms Paliskis-Bessell —No, that would not be acceptable over here at all.

Senator HEFFERNAN —Very good. We are on your side—or I am, anyhow.

Mr Saunders —I think at the end of the day we are one country. It should be the same rules everywhere.

Senator HEFFERNAN —So you would have no objection to national harmonisation of the standards of branding and identification?

Mr Saunders —No.

Ms Paliskis-Bessell —No, not at all, provided the Western Australian system was not compromised at all.

Senator HEFFERNAN —Yes. Obviously that would make a lot of sense.

Senator SIEWERT —If lamb substitution is happening through imported lamb, the only sanction you have is really to refer it back to the state of origin or for the wholesaler, retailer or whoever who is bringing it in, telling them they are not allowed to put it on the market.

Ms Paliskis-Bessell —Yes.

Mr Saunders —Yes, and we can take legal action under the act against those people.

Senator SIEWERT —I am sorry, that is a bit different from what I understood from your answer before. What legal action could you take?

Mr Saunders —If we find that a wholesaler has brought into the state product that is unbranded, the act and regulations do allow us to take action against him for bringing that product in.

Senator SIEWERT —Because it is unbranded?

Mr Saunders —Yes. But, normally speaking, we would go to them and try to resolve it in a sensible fashion.

Senator SIEWERT —But if you discovered mutton branded as lamb you could not take action in WA; you would have to get the particular state of origin to take the action?

Mr Saunders —That is a difficult question. I think it would be a question of whether they knowingly forged it.

Senator McGAURAN —I have no questions at this point. I was happy to hear that the Western Australians called us one country, so they have given up their idea of seceding.

Senator SIEWERT —Don’t jump to that conclusion too quickly!

Senator HEFFERNAN —But they did also say there was lamb coming from Victoria that was not lamb.

Senator McGAURAN —Yes, and then they went on to say that it was not a deliberate pattern surely by Coles; they did not understand the markings.

CHAIR —I am a West Aussie but I am not talking secession. That is nonsense, because you cannot eat iron ore. Lamb is nice but not in company with iron ore. I would like to thank the Western Australian Meat Industry Authority for their time. The committee does appreciate it. Senator McGauran, thank you.

 [11.30 am]