CONNOLLY, Mr David, President, Northern Territory Cattlemen's Association [by video link]

EVANS, Mr Will, Chief Executive Officer, Northern Territory Cattlemen's Association [by video link]

[14:03]

CHAIR: I remind senators that the Senate has resolved that an officer of a department of the Commonwealth or of a state should 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 policy or factual questions about when and how policies were adopted. Officers are also reminded that any claim that it would be contrary to 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. I welcome representatives from the Northern Territory Cattlemen's Association. Do you have an opening statement to make?

Mr Connolly : Yes, I do. Good afternoon, senators. I'd like to take this opportunity to thank you on behalf of the membership of the NTCA for calling this inquiry and providing the opportunity for myself, on behalf of the NTCA, to present today.

I'd like to start by providing some background on the pastoral industry in the Northern Territory. The first pastoral lease was granted in 1876, in the area in which Alice Springs is now situated. In the 145 years since, the cattle industry has grown to encompass more than 220 pastoral leases across an area in excess of 600,000 square kilometres, with some of the most remote regions of northern Australia. Producing more than 500,000 cattle per year for domestic and international consumption, the NT cattle industry is a vital contributor to the Territory economy.

While much of the production of the Territory is live exported to South-East Asia, the Territory is also one of the largest production areas for organic and EU certified beef. The arid and semi-arid regions of the Territory produce some of the highest-quality grass fed cattle anywhere in the country and, I would wager, the world. The grasslands of the Barkly are a breeding ground for much of the premium cattle you'd buy in any quality restaurant in Australia, with some of Australia's largest cattle companies using their Territory properties as the beginning of a carefully designed supply chain, culminating in South-East Queensland feed lots and processing facilities and in premium beef being served in high-end restaurants domestically and internationally.

Many members of the NTCA are also actively involved in some of the largest carbon abatement programs in the world. The Tipperary Group, of which I am general manager, is one of these companies. With careful planning and administration, we are able to reduce our carbon outputs considerably each year. This is an area in which both myself and the NTCA are continuing to work so as to ensure that the dedication and positive practices our membership practice in managing their land and their cattle are recognised not just by the government but by the community. This is the legacy of which we are extremely proud, and one, as the NTCA, we must always work to improve.

Now we move on to why we're here today. Simply put in my brash manner: we shouldn't have to be here. We as a beef industry should not have had to have waited for the actions of a brave senator to pull this inquiry together to answer a question that is simple. The obvious answer to the question posed by this inquiry is: you should not be able to call a product 'beef' when it simply isn't. You especially shouldn't be able to do so when you market your product as being superior and supply no evidence for this claim. You especially shouldn't be able to do so when you're being dishonest and misrepresenting the enormous progress the Australian beef industry has made to improve practice in line with changing community expectations. The very definition of 'beef' as supplied by the Oxford Dictionary is 'the flesh of a bovine cow, bull or ox used as food'.

The fact that the ACCC has failed to act in this space is an indictment on them and their leadership. The fact there is now a Senate inquiry about this topic speaks to the level of community concern regarding this issue. You simply cannot call a hang-glider a 747 and demand people consider them the same thing. Integrity is vital not just to the beef industry but to the domestic consumer market. We must be honest about what we do and the ways that we do it.

I thank you for the opportunity to present today, and would like to close my remarks here. I believe Will may also have a short statement to make regarding the position provided in our submission. Following this, we would both be most happy to take your questions.

Mr Evans : As David has already supplied his statement, I will keep mine brief. The core of the NTCA submission can be broken down into simple elements provided in the principal section at the start of the document. These provide an argument that there are legal questions to be answered and that the ACCC has a role in ensuring they are pursued. However, we have little faith that the ACCC will pursue them without an instruction to do so. Their conduct in this area to date has been disappointing.

The ACCC has previously expressed food labelling as a priority area of focus. That was a few years ago. Since that time they've developed an agricultural market branch and appointed a deputy chair with an agricultural background, yet we're still here today answering what should be a simple question. I was particularly concerned by the ACCC's contention that complaints received to date held little value as they predominantly came from affected industries and industry stakeholders. I would ask the ACCC: who initially made these complaints to them regarding production sector practices that led to their involvement in the animal production sector only a few years ago? Did all of these complaints come from consumers or were there also industry and activist organisations involved? I would also ask why the concerns of the affected industry are less than that of the community, and how they have reached this determination of value.

It strikes me as unlikely that there would have been no communication between any of these fake-meat companies and the ACCC. Many of these companies have only recently adopted the practice of utilising animal production sector product descriptors, and we're led to believe that at no point has the ACCC provided guidance on this. I would be interested to know what involvement the ACCC has had with these companies to date.

To conclude my remarks, I recognise the chair and the committee for calling this inquiry. The COVID-19 situation has obviously had a detrimental impact on our ability to hold this face to face. I extend an invitation to the committee to come up any time. We'd be proud to show you what it is we do in the Territory and the contribution that we make to the industry and to the environment. I welcome your questions.

CHAIR: Thank you very much for that invitation. You should know that the committee is equally disappointed not to be able to be in Alice Springs or Darwin this week, hearing from you. I know that Senator McCarthy would also have been a great host for us to visit in the Territory.

Senator McCARTHY: Come any time, Susan. It's wonderful up here.

CHAIR: Thank you very much. In fact, I am coming next week because it seems that I can enter the Northern Territory. I look forward to catching up with you. Mr Evans and Mr Connolly, you made a number of submissions on this inquiry, all of which have elements that we want to discuss. A number relate to the ACCC. Have you also considered the FSANZ definition that has allowed this situation to arise where other proteins are able to be labelled as 'beef' and with other meat descriptors? I'm not sure who I should direct that to.

Mr Evans : Our submission makes the contention that there are legal questions that need to be answered. The impediment at this stage appears to be the way in which these questions are being presented or not presented to the courts. The ACCC makes determinations around what is prosecuted or what actions are taken. Their submission to this inquiry was interesting in that they felt like there weren't questions that needed to be answered and that consumers weren't being misled. Largely, they felt that because of the quantum of the complaints that they received. I'd suggest that the quantum of the complaints was probably less than the concern that is in the community, and that it would be important for them to consider this more closely. If you look at the broader consumer law there are probably other questions that need to be answered as well.

CHAIR: Certainly, a number of people have contacted my office and me, saying that they have bought products in confusion. They had not considered complaining to the ACCC because either they weren't aware that there was an avenue for them to complain or the product value was so small that the time to spend complaining didn't add up. But they'd certainly bought the product in confusion because of the descriptors on the packaging.

Have you considered the voluntary guidelines approach that is being managed by the minister for agriculture in that consultation meeting? Were you invited to be a part of that and are you aware of the recommendations around that?

Mr Evans : No. To date, I think the National Farmers Federation and the Cattle Council have had involvement in that, but we haven't been invited to provide input into that process.

CHAIR: That's fine. I want to talk to you about circumstances that we just discussed with the previous witness around claims that are made about animal production in Australia and that meat consumption should be curtailed due to environmental reasons. Would you like to comment on some of those claims that are made by other parts of industry and what it is the proponents are doing? Would you like to make comments around some of the environmental claims that are made around cattle production in Australia?

Mr Evans : I might pass that to DC.

Mr Connolly : Unfortunately, the claims, as pointed out by the previous witness, are just untrue. It's easy to make claims and have them as unsubstantiated claims. The grasslands of the Northern Territory are some of the most pristine cattle-growing areas in Australia. I was pointing out in my summary that we have very large production areas of organic and EU certified beef. For those who don't know, there's no chemical use allowed in EU beef or organic beef. There are no hormonal growth promotants allowed in EU certified beef. There's not even any chemical use allowed for any fly or other pest treatments. So it's a very rigid and very strict regime for those two types of production systems. So, from an environmental point of view, you can't have it any more pristine in these grasslands of the Northern Territory. So I think it's a short answer from my point of view: it's easy to make unsubstantiated claims against agriculture as a whole and against beef production, but they're just that—they're unsubstantiated claims—and those in the industry and those close to the industry or even on the periphery of the industry know that beef production in our area and in most areas of Australia is pristine production.

CHAIR: I want to ask you some more about the value of 'beef' or 'red meat' as a descriptor on packaging. Where this inquiry has stemmed from is that there are products being marketed in supermarkets alongside real red meat and other animal product foods. They are using pictures of a beast. There is the word 'beef' on it, and then there are the words 'plant based' in smaller labelling. If there is a premium to using that descriptor and if that's the reason it's on the product, what do you think are the premium product values that are attached to red meat and to beef that people would be wanting to associate themselves with, if in fact it's a plant based protein?

Mr Connolly : From a beef point of view, the values that people usually attribute to beef is that it is a clean, green protein source. Because of the hard work that's been done by industry associations in promoting beef and putting out the fact that it's a live protein source and that it's heart-tick approved and those sorts of things, the value of the word 'beef' itself almost becomes our total value because that's the very essence of our branding—that it is a clean, green protein source, particularly with rising knowledge of grass fed beef. I've certainly noticed that people are more and more looking for the differentiation between the different types of systems that are used to raise beef, but I think it's almost totally our value system. If plant based proteins didn't see that as a high value, then they wouldn't be putting pictures of livestock on their packaging, and they wouldn't be calling it 'beef'. They'd be calling it just 'plant based protein' in very large letters. That would be my summary.

Mr Evans : If I could add to that, one of the things uncovered in our research for the submission was that there was a body of academic evidence that provides that the value of labelling these fake meat products as 'beef' or 'chicken' or 'bacon' is in describing, basically, a sensory user experience. So, if you take those words off those products, consumers aren't in and of themselves able to determine or understand what the product is meant to be mimicking. I think that's an interesting finding of the research that, if you sat it next to a beef patty or an object that says it's a beef patty but you didn't put the words 'beef' on it and then include something that says 'it's plant based beef' or 'it's not beef' and you cook them side by side, people actually don't see the relation to them. So the evidence suggests that the perception or the value that these companies are trying to leverage off is the familiarity that people have and the confidence that people have in beef—especially in Australian beef.

CHAIR: Further to that, could you provide some idea of the investment that red meat producers make each year in the Northern Territory towards the underlying principles of what their product is—animal welfare investments, pasture investments, genetics and all the things that go to making up that premium value of that red meat brand—such that a plant based protein would want to attach itself to that? Can you expand on what the industry in the Northern Territory would invest every year into building their brand definition?

Mr Connolly : Senator, without putting a dollar figure on it—and I don't think you're looking for that—carrying on with your theme is exactly right. Our cattlemen invest in a number of different quality assurance programs which are underpinned by livestock production assurance. On sending our live animals anywhere, under this program, we have to fill out what's called a national vendor declaration, and the vendor declaration treats our product as exactly what it is, and that's food. We're part of the food supply chain, and cattlemen and livestock producers have to invest in that food chain. I'll talk about other things later, like genetics and so forth, but the investment in livestock production assurance, investment in the national vendor declaration and investment in the food chain is a very high-level, very costly investment because it's about making a record of every treatment that you do on farm, on farm paddocks and on livestock. Any areas of the farm that may be deemed as unfavourable or an old contaminated area that might have been used for some unfavourable practice in the past is then sectioned off and fenced off from your property and is not used.

So there's a considerable investment in just being part of the food chain that Northern Territory and Australian producers have invested in and they have come along into that system to make that investment as part of the food chain. The Australian beef image of being clean and green is not just a marketing ploy; it's backed up by an assurance program which we invest in and which we invest in readily because we all understand that we are part of that food chain. We're making something in the food chain that goes out to customers. But we also invest on farm in things such as our genetic improvement. We invest in pasture improvement. We invest in fencing and infrastructure like cattle yards to make sure our livestock have minimal bruising or no bruising when we truck our livestock. We've invested in better ways of transporting our livestock. We've invested in huge programs of animal welfare to ensure that we have the latest animal welfare programs or the latest animal welfare technology on our pastoral holdings and our farms. We've also invested lately in ensuring that our livestock practices are done with minimal pain. We've invested in pain relief formulations. We've invested in those treatments that we can give our animals so that they don't feel pain during part of our livestock handing or our livestock husbandry. They're very expensive treatments. Most beef producers have either changed over to these activities—someone very dear to your heart that was at the very start of this cycle. Most beef producers are changing to this system of pain relief or have already changed to it. They're some of the investments that producers make to back the brand, to back the brand that is beef, to back the association with our supply chains being part of the food supply chain.

CHAIR: I can't take up all the time myself. I will hand over to you, Senator McCarthy.

Senator McCARTHY: Thank you, Chair. I want to go back to a couple of things, if I could, Mr Connolly, with the ACCC. My screen froze so it's quite possible the chair may have checked with you on this so please let me know if that is the case. I want to see whether you have had direct communication with the ACCC around these issues?

Mr Connolly : I personally haven't had any direct contact with the ACCC around the issue. Will, as part of our association, may or may not have had some direct contact.

Senator McCARTHY: Is that something, Mr Evans, that the NTCA was planning to do or is going to do? I'm just curious that's all.

Mr Evans : I think at this stage unless the ACCC expresses some desire to become interested in this space the engagement with them would largely be a waste of time.

Senator McCARTHY: So you're fairly disappointed, obviously. I know you gave that in your statement as well, that you had little faith, if any, in the ACCC's ability to deal with this matter in the way that you'd like to see it dealt with.

Mr Evans : Yes, I think it's correct. Unfortunately, where the ACCC, a few years ago, was very heavily involved in this space in regulating claims like 'free range' or 'barn range', or a variety of things in the poultry sector, they seem to have now moved away from this space and have other areas of focus and other priorities. It's disappointing given that a reading of consumer law and the precedents that were established by the ACCC in that time would lead me to believe that this is an area where they could very much have an active involvement. Given the previous conduct they've had it would make a lot of sense for them to level the playing field.

The ACCC's stated interest in the food production sector previously was due to power imbalances between the production sector and the consumer. So the ACCC came to the position of, 'We need to insert ourselves into this to make sure that whatever the production claims are that are being made have a level of voracity around them and that the consumer can be confident that the claims made on the label are accurate.' Why in this circumstance they've now decided it's not relevant here—I think it's in David's letter at the start of our submission. But the only thing that everyone at this inquiry will agree on is that these products are designed to be misleading. They're designed to be something that they're not. They're designed to mimic a superior product. The manner in which they make up for that shortfall in quality is that they leverage our reputation.

I think there's a question to be answered when they make claims around their product being environmentally superior to the beef industry, and there are a number of companies that do. In fact, I would say it could potentially be the majority of these companies that do. There's a reasonable question to be answered as to how are they supporting those claims and what evidence they are providing. As David has mentioned extensively, the contributions that the beef industry makes to environmental management are substantial. Less than one per cent of land under Territory pastoral lease has been cleared in the history of the industry. We are an extensive rangelands production system. If a Territory steak were to fall next to one of these products in a market by happenstance and the product said, 'Beef is bad for the planet and beef is destroying the environment,' that would be misleading to the consumer, but the only way the consumer would be able to know if that was misleading would be if evidence was provided or was required to be provided by the plant based company around what their production systems are.

Senator McCARTHY: Mr Evans, are any of these plant based companies based here in the Northern Territory?

Mr Evans : I'm not aware. There may be some that provide a product to the local market, but I'm not certain.

Senator McCARTHY: We'll probably find out with this inquiry and see where we are going with that across the country as well. We did have Dr Mohr-Bell just before. A question I put to her that I would like to put to you is: when did you start seeing plant based companies start to leverage off your products?

Mr Connolly : I've noticed it probably in the last 12 months. I guess it's more so not because they get the marketing space but because I've become interested in it in the last 12 months and I've been looking for it. That's when I noticed it.

We talk about livestock production assurance and about how we dedicate and document our product in the supply chain. I've always been interested in what documentation and what level of commitment—what systems—a plant based protein that holds itself as beef but is made in a petri dish has. I am unaware—and there could well be some—what systems they have that show me they have safe systems and the chemicals they are using to make that beef are as safe as the systems I have to make real beef, because I have to document my systems—industry has to document them—and send a legal document saying what I've done with those animals, what treatments they've had and how they've been raised.

Senator McCARTHY: Mr Connolly, that's a question the chair and I definitely want to put to those companies as well in our inquiry so we can better understand what's going on out there and we can make recommendations to government as to what needs to happen going forward. Thank you for that.

Finally—and I am conscious of the time—I wonder if there are any examples that you would like to share where your members think it has had a direct impact on the opportunity of selling their products as a result of this. Have any of your members given examples that you are aware of? By all means, you can take the question on notice if you want to.

Mr Connolly : The only thing that I have had since I have been the President of the NTCA is that members have said that they believe they're suffering reputational loss. These companies have said, certainly in the media, that raising beef is not environmentally sound and the plant based protein is a more environmentally sound way to do it. Members have commented to me that they believe they are suffering reputational loss and they have asked me as President of the NTCA what their organisation, the NTCA, is doing about restoring it members' and growers' reputation back in the marketplace, because they feel under threat with regard to how they are raising their livestock.

Senator McCARTHY: Thank you, Mr Connolly and Mr Evans. Back to you, Chair.

CHAIR: Thank you so much for the time you've spent in preparing your submission today and being online. We could have talked at length for much longer. If there's anything that you feel we didn't touch on today or that you would like to bring to the committee's attention, please don't hesitate to make an additional submission or to contact the secretariat. Please know that you go with the committee's thanks.

Mr Connolly : Thank you for your time.