Any Business Would Do the Same?

[cakadu]

Rsomer, I do believe that you are trying to compare apples and oranges with respect to the various entities, if I'm not mistaken.

Canada Beef Export Federation is a not-for-profit organization (I believe) and would have a different outcome than the boards of Cargill/Tyson and XL, which are purely profit driven in terms of getting a return for shareholders. What the packers are doing may not be morally or ethically correct, but as far as I can tell, they didn't break any laws, which Martha, the people at Enron and some of the others did. Enron manipulated the books and outright lied, which I don't think the packers have.

Your outrage is understandable given the current situation. The system under which the packers profitted was seriously flawed and forced producers into a bad situation, which persists to this day.

The ethical thing to do would be for the packers to drop their prices on beef so that more of this can be spread around. Thing is they won't and they haven't whenever the various meats have run into trouble. Let's face it, it isn't only the packers that are keeping the price of beef up in the store. What are retailers making right now?

Does anybody know if the packers are charging retailers and food service more, or are the windfall profits a result of being able to pay so little for the initial product?

It's easy to continue to blame the packers, but what are we - the producers, ABP, CCA, CBEF and whomever else you want to name, going to do about it? What do you want ABP to do for you? What should you be talking to your representatives and delegates about?

Now is the time for change.

[rsomer]

I never confused CBEF with the packers, just noted the comment on governance and pointed out the packers have serious issues in this area. I think if the matter were looked into the packers have broken laws on fair trade as outlined in the Competition Act. I thought the ethical thing for the packers to do was raise the price they pay for fat cattle so they are not strangling the producer while the packers realize huge profits.

The price the packers pay our producers is not determined by supply/demand. The packers have conspired to artificially fix the price of fat cattle at a price lower than the real market demand would suggest it should be. The actual market demand is represented by the very strong prices for boxed beef which the packers can access but the producer cannot. The packers are profiting from the difference in demand between the two levels of the supply chain.

I did a little checking and in Canada our anti trust body is the Competition Bureau which enforces the Competition Act. Some of the issues addressed by the Competition Act include:
· regulation of mergers and acquisitions among businesses with the policy goal of ensuring adequate and healthy competition within the economy;
· conspiracy to lessen competition;
· agreements to fix prices;

The Commissioner of Competition heads the Competition Bureau and is Canada's chief antitrust enforcement official. The Commissioner can launch inquiries, challenge civil matters before the Competition Tribunal and refer evidence of criminal offenses to Canada's Attorney General (who then decides whether to launch criminal proceedings).

The Commissioner is obliged to commence a formal inquiry whenever:
· a criminal offense has been, or is about to be, committed;
· grounds exist for the Tribunal to make an order regarding a reviewable practice;
· so directed by the federal Minister of Industry; or
· on the sworn application of six Canadian residents

What are we going to do about it? How about bring the issue before the Competition Bureau to have criminal charges brought against the two packers as a start to bringing fairness back to the industry.

The Competition Bureau can be contacted at 1-800/348-5358
See: http://cb-bc.gc.ca/epic/internet/incb-bc.nsf/en/home

[cakadu]

This has piqued my curiosity and I'm going to start a new thread so that this one doesn't get too long-winded.