Scone

Scone was recently purchased by JBS in their acquisition of Primo small goods. Scone is a beef and sheep export accredited plant, currently in operation.

Other Names

  • Scone Primo
  • Scone JBS

Current Operation

  • Aus Meat Accreditation registration dated 29/12/2015 #0262 – JBS Australia Pty Ltd (Scone).1
    • registered as a Beef and sheep, Offal export facility.1

Direct employment enquiries to www.jbssa.com.au

Location   

  • Scone is located in eastern NSW. Approximately 150km north west of Newcastle

Aust. Scone

scone 2

Hema Maps – Australia Truckies atlas.

Owner/s

  • Primo smallgoods.2
    • P & M Quality Small goods Pty Ltd (Primo).8
    • Purchased Scone site in 2000.2
      • sold in 2015 to JBS
  • JBS Australia – purchased 2015

Beef central 27.11.2014.b

JBS logo. Source Beef Central 27.11.2014

Operation   

  • Scone is currently an export accredited facility that processes only cattle.

Other historical and current meat processing facilities located in Australia can be viewed at;

Australian abattoirs inactive map

abattoirs_edited-1

History of  Scone Establisment # 262

1990

8. ABARES Nov 2011_edited-1

Proportion of cattle slaughtered by ownership of abattoirs 1990
Source ABARES foreign ownership 2011 Pg 31

1991

  • 77 Beef export Abattoirs are in operation in Australia at this time.77
    • 27 have some level of foreign ownership.77
    • Ownership dominated by Japan, UK and the US.77

1996

1999

  • May. Aberdeen abattoir (NSW) closes employed 400 people, Owned by AMH.81
  • More Hunter abattoirs could be threatened in a meat industry shake-up.81
  • State government are negotiating with AMH  to persuade the company to re-open Aberdeen.81

2000

  • Primo Small goods purchase the Scone abattoir site.2
  • Scone was previously only a domestic registered site, after Primo acquisition it was export accredited.8
    • Prior to Primo purchase the abattoir had been a multi species processing facility supplying mainly Hunter and Sydney butchers, It was converted to only beef for export accreditation.40
    • Primo smallgoods already established company that specialise in premium quality deli meats.2
      • Primo was established in 1985, originally at Homebush, Sydney.3
    • Have a manufacturing plant at Chullora, Sydney.2
      • Purchased Port Wakefield Abattoir in SA in 1999, pig processing plant with capacity to process 10,000 pigs per week.2
  • Scone abattoir, single species plant (beef).3
    • Central point of Primo meats production of increasing fresh meat business.3

2001

  • Primo purchase a Melbourne distribution facility to support expanding growth in Victoria.2

2002

  • Scone abattoir under goes a $15M expansion.82
  • August. Primo has turned to Hunter Institute of TAFE for its training needs.82
    • TAFE will train 150 employess under existing traineeships.82
    • 50 new entrants later.82
    • main objective is that training will comply with requirements of the export licence.82
    • Training to be conducted in the workplace, onsite and at the TAFE.82
  • Scone facility expected to require more than 300 employees by the end of the year.82

2003

  • April. Scone Abattoir is set to double its staff numbers.83
    • currently employs 190.83
    • following expansion will employ 350-400 over the next 12 months.83
  • Area was currently in drought and the extra jobs would give the region a boost.83
  • Further expansion is planned with a development application before the Scone Council for a small-stock boning room and packing room.83
  • The plant mainly kills and debones but recently has started value adding services for direct sale from supermarket shelves.83
  • Parkville Piggery near Scone went into voluntary administration.83
    • owned by Taiwanese-Indonesian interests.83
    • Looking for a buyer for the facility.83
    • Owe $2.5M. Employ 30 people.83
  • December. An Engineer who was burnt by ammonia is expected to lose his sight.6

2004

  • Scone abattoir could face major stock shortages if one of its main suppliers are forced to close.84
    • Killara feedlot, near Quirindi supplies 80% of Scones slaughtering stock.84
    • Lack of water could force it to close within 18 months.84
    • Feedlot’s application for 15,000 ML water could be cut by 70%.84
      • New State Governments water sharing plan for the Namoi Valley.84

2007

  • Port Wakefield plant is guttered by fire (Owned by Primo).9
    • Caused $15M damage, started by an electrical fault.9
    • no people or animals injured.9
    • Employed 368 employees and up to 100 other contractors.9
      • including 10 skilled Chinese migrants.9
      • redundancies not been ruled out.9
    • Primo had plans for further investment and doubling of the workforce.9
    • Had been processing 11,000 pigs each week.9

2006

  • Primo acquire the Mayfair brand and a manufacturing plant in Greenacre.2
  • Closure of the export abattoir at Aberdeen abattoir (NSW) had significant effects on the livestock sale methods in the region.7
    • Saleyard inputs significantly increased.7
      • Many saleyard opportunities meant greater journeys.7
      • affected animal welfare and operation costs.7
      • many producers had to form marketing groups to make up enough numbers to sell for viable transport.7
  • Small domestic facilities in the area.7
    • Woy Woy (NSW) now closed, Kurri and Scone (domestic  license before export accreditation in 1999.8) catered to the local trade markets of Newcastle and Sydney.7
      • positive impact on production of vealers, yearling steers and heifers.7
        • paid a lesser price per kilogram.7
  • Export licensed facilities in the area.7
    •  Ipswich (QLD), Singleton (NSW), Wingham (NSW) then owned by Nippon.7
      • Continue to source large number of stock from the region.7
      • require heavier than 240kg carcase weight (480kg LW).7
    • Tamworth (NSW) then owned by Cargill tends to kill lighter cattle for supermarkets.7
    • Scone (Primo) kills mainly domestic cattle, with small numbers of stock for the smallgoods sector.7
  • Primo Australia Scone abattoir is ranked equal 25 of the top 25 red meat processors in Australia.8
    • Throughput in 2006 32,000 estimated tonnes carcase weight.8
      • Includes tonnage of Port Wakefield plant
    • Kill share percentage of 1.1% (across Australia).8
    • Employs 360 people.8
  • Scone plant has been upgraded in the last 5 years.8
    • New slaughter floor, export boning room, chiller and freezer facilities.8
    • improvements to rendering and environmental structures.8
  • Scone plant is currently operated/owned by P & M Smallgoods Pty Ltd (Primo).8
  • Currently processing 600 head cattle a day.8
    • one shift.8
    • processing grassfed and grainfed yearling prime cattle, as well as export steer and cows.8
    • Most livestock sourced from Hunter region, Eastern NSW.8
  • Primo’s major export markets are Korea, USA, Japan, Canada and Taiwan
    • Exports 40%.8
    • Domestic supply 60%.8

2007

  • Primo Australia Scone abattoir is ranked equal 21 of the top 25 red meat processors in Australia.10
  • Throughput in 2007 35,000 estimated tonnes carcase weight.10
    • Port Wakefield not in operation at this time.
  • Kill share percentage of 1.22% (across Australia).10
  • Employees 360 people.10
  • Primo have begun re-construction of Port Wakefield site following devastating fire in 2007.10
    • re commissioning expected to be September 2008.10
  • Primo’s major export markets are Korea, USA, Japan, Canada and Taiwan.10
    • Exports 50%.10
    • Domestic supply 50%.10
  • Scone facility is currently processing 600 head per day.10
    • Largest employer in the region.10
    • Has capacity to process 35,000 ETCW.10
  • Primo major brands are.10
    • Hunter Gold, Primo and Milton Farm.10
  • St Heliers Correctional Centre commence a work release program with Primo meats at Scone.12

2008

  • Primo acquire cold storage facility.2
    • Included equipment at a Blackwater manufacturing facility.3
  • Februrary. Primo could face fines of up to $275,000 if found guilty of labelling foreign pork as local product.85
  • Primo is under investigation for meat imported from Denmark & Canada.85
    • Primo have voluntarily withdrawn some products.86
    • Meat in question is a very small volume of the companies total business.86
  • Currently 70% of the manufactured pork market in Australia (hams, bacon and smallgoods) is made up of product sourced from highly subsidised countries such as Denmark, lesser extent Canada and the US.85
  • December. St Heliers Correctional Centre has had 30 inmates progress through their work release program with Scone abattoir.12
    • 6 workers have secured permanent employment with the facility.12
    • When prisoners have been involved with work experience their liklihood of reoffending reduces.12

2009

  • Primo acquire the entire business operations of a former competitor – Hans Continential smallgoods.2
    • Improved overall Primo efficiencies.2

Beef central 27.11.2014

Primo Logo Source Beef Central 27.11.2014

2010

  • February. Contractor suffered serious burns when he cut a gas pipe and it ignited.19
  • Work is scheduled to occur on fire damaged portion of abattoir.11

IBIS Jun 2010_edited-1

Major Companies in the Australian Red meat processing industry

Source IBIS world June 2010

  • September. Primo Australia Scone abattoir certifies that the establishment has a HACCP based food safety program.13
    • Australian Quarantine Inspection Service (AQIS) is responsible for auditing.13
    • HACCP plan is re-assesd annually or when ever there are alterations or additions to the process.13
    • Part of the HACCP requirement is microbiological testing of carcases during processing and further testing of manufactured meat destined for grinding.13

2011

 

  • January. Devastating floods across Central and southern QLD and large parts of NSW and Victoria.79
    • affected slaughter numbers to abattoirs.79
  • April. Worker is killed when the roof of a freezer collapses on him.14
    • Taiwanese national was trapped under rubble and fallen ice.14
    • 290 workers were evacuated.14
  • Blast freezer wall 5m high collapsed.15
    • four other blast freezers similar to the one that collapsed were adjacent to it.15
    • All were shut down.15
    • build up of ice had contributed to the collapse.15
  • Other freezers in other parts of the facility were in operation.15
  • Workers were back in the job, day after the collapse.15
  • Scone currently had 25 Taiwanese nationals working at the site.15
    • as well as 100 Chinese nationals.15
  • Work scheduled in shut down period (Chrismas) to occur on rendering shed.11
  • 7. ABARES Nov 2011_edited-1

    Red Meat throughput Australian abattoirs, Foreign and Australian owned 2011 Source ABARES foreign ownership 2011 Pg 29

  • October. Affinity Equity Partners become a major shareholder of Primo.2
    • Acquire 70.1% of the Primo group.2
    • reported $900M.22

 

2012

  • Primo open a $200M factory in Wacol, QLD.2
  • Primo group are currently Australia’s largest Ham, Bacon, Salami and Deli meats manufacturer.2
    • supply nations major retail groups.2
  • September 12. Registration of trademark name Hunter Valley Quality Meats Est No 262.16
    • Trademark number 1513894.16
  • November. Coonabarabran abatttoir (NSW) Bunganbah Meats closed November 2.17
    • 30 people out of work.17
    • Was the only facility 3 species abattoir west of the Great Dividing range in NSW that provided a service kill for local butchers.17
    • None of the larger abattoirs serviced small scale butchers.17

2013

  • October. Scone abattoir is fined $110,000 after a contractor suffered serious burns when he cut a gas pipe and it ignited Feburary 2010.19
  • December. EBA negotiations had been going for 7 months.21
    • 150 union members would take part in a strike action.21
    • day shift and afternoon shift would each strike for 2 hours.21
      • with an indefinite overtime ban to follow.21
    • Fair work commission had approved further strike action.21
  • Primo managing director Paul Lederer.21
    • Primo started in 1985 with 38 people.21
    • Now employed 4,000 .21
    • Turned over $1.3B a year.21
  • AMIEU Grant Courtney – changed conditions at the abattoir meant Primo expected meatworkers to process 20% more animal carcasses a day.21
    • workers wanted productivity payments.21
    • Company wouldn’t consider.21
  • AMIEU claim that Primo were  employing another 300 or so people through labour hire firms.21
    • local people were being knocked back for jobs.21
    • Company was employing back-packers and foreign nationals.21

2014

  • January. Union members went on strike twice before christmas over EBA.22
  • Paul Lederer published an advertisement in the local paper as an open letter to the Scone community.22
    • described the strike action as irrational and ridiculous..22
    • “Union demands are totally unreasonable and will only destroy more jobs in the industry”.22
  • Unions response “this company can hardly cry poor turning over $1.2B a year and with its chief executive one of the richest men in the meat industry”.22
  • Primo pays the lowest wages in meat processing around the country and the workers employed through third party labour hire companies earned even less” Grant Courtney.22
  • “For nine years while the Scone plant was not profitable, Paul Lederer pumped money into keeping it going and everyone employed” Primo Spokesperson.22
  • AMIEU is angry Paul Lederer  heads a consortium to buy the Football team ‘Wanderers’.23
  • March. AMIEU claim vast majority of workers at the Scone abattoir are forced to work excessive hours, grossly underpaid, mistreated, including allegations of sexual harassment.24
  • Workers are paid $7.70 per hour, less than minium wage and not advised to pay tax.25
    • up to 90% of the entire workforce are international.24
    • 70% of Primo’s workers on temporary 417 Visa’s.24
      • people could stay and work for 2 years.24
    • foreign workers are replacing local workers.87
    • 75 workers stated they had been advised by the labour hire company to lodge an Australian Business Number (ABN) without being advised to get a Tax file number.25
    • Estimation of 10,000 temporary international workers working in the Australian meat industry.24
    • Labour hire company – Scottwell recruits Chinese, Taiwanese, Japanese and Korean employees to work in abattoirs.24
      • across 19 different facilities in 3 states.24
      • 1,100 people.24
  • Primo deny claims workers are underpaid.25
  • Fair work Ombudsman take court action over claims by the AMIEU that workers at Scone abattoirhave been underpaid more than $41,000.26
    • Amounts ranging from $347 to $10,257.26
    • Employees were Chinese entry level labourers in slaughtering, boning and dispatch.26
    • 8 of the workers are casuals on short term visa’s.26
    • 2 were immigrants employed full time.26
    • Employees worked more than 38 hours, but received no overtime or penalties for casual loading, public holidays.28
    • full time workers were -sham contracting. Ray Holding has represented to the two full time employees they were independent contractors.28
    • Legal action commenced against Raying Holding Pty Ltd and another individual- who supplied the workers.26
      • hearing to be held March 28 in Sydney.27
      • Raying Holding face penalties $51,000 per breach.26
      • Alleged underpayments have been rectified but legal proceedings were commenced due to significant amount involved and vulnerability of the workers.26
  • Primo takes an advertisement in the Newcastle Herald defending its employment practices.30
    • claims never knowingly incorrectly paid a worker.30
    • less than half of Primo’s workforce were on 417 Visa’s.30
  • AMIEU claims Primo supplied personal information of employees to Colonial First State  Super without written authority from the workers.42
  • AMIEU status of industrial bargaining – Workers have voted to take protected action.42
  • AMIEU believes another 23 Scone workers have been underpaid.31
  • April. Hunter Valley Quality Meats Pty Ltd T/A Primo Australia Scone Abattoir Enterprise Agreement 2014.33
  • June. Scone announces large expansion plans.35
    • Currently employs about 600 people.35
      • expects to increase employees by 100 people.35
    • Processing 6 days a week.35
      • 1,000 head a day on a double shift.35
    • Expansion will include .35
      • extension of plate freezer capacity to 70,000 cartons.35
      • reconfiguration of works.35
      • extension of load out facility.35
    • $40M project expected to start in August and take 14 months.35
    • Plans are currently submitted to the NSW department of planning.35
      • plans have been worked on for last 18 months.35
  • Other abattoirs in the region that were export licensed.40
  • Meat and Livestock Australia (MLA) predict looming shortage of cattle and a robust global demand for beef into 2015.40
  • By June 2015 the Australian cattle herd was forecast to have fallen to 26.1M head, the lowest level in 2 decades.40
    • Expansives and severe drought has had significant impact on cattle production regions.40
    • sustained high levels of cattle slaughter and near record live cattle shipments have eroded production capacity.40
  • Scone is currently sourcing 75% of the cattle are from producers within 500km of Scone.35
  • 60% of the beef production is exported to about 50 countries.35
  • Chinese demand is encouraging, but also Middle East, Asian markets and Japan.36
  • producers in the area have been calling for more processing plants for several years.36
  • July.Primo consider taking in more Filipino workers to fill vacancies via the 457 visa programme.39
    • Primo already has 20 primary 457 visa holders that receive sponsorship.39
    • Join some 600 Australian and multicultural workers in the company.39
    • Under 457 sponsorship a minimum of 3 years experience is required for onshore meat workers or minimum 9 months training.39
  • JBS Australia purchase majority shareholding in NSW based Andrew Meat.37
    • specialise in high quality, portion cutting and further processing of meats for domestic and international restaurant and foodservice customers.37
    • produce ready-cooked meals.37
    • company banner Creative Food Solutions.37
    • Andrew Meat will allow JBS expansion into high growth retail and value-adding segments.37
  • Expansion of the Andrew Meats business will start in November .38
    • JBS global strategy to expand into value added meat protein – opportunity to expand margins.38
    • JBS have an existing value-added division – Food Partners.38
      • supplies food service customers like Pizza Hut and Domino’s with toppings.38

Andrew meats logo

Andrews Meat Industries logo Source Beef Central 27.11.2014

  • Andrew Meats focus will be produce ready meals.38
    • ‘grab & go’ beef roasts, designed to compete head on with hot cabinet roast chickens sold in supermarkets.38
    • Domestic markets were very immature but also with significant growth potential.38
  • At this time JBS operate.37
    • 10 processing facilities.37
      • Daily processing capacity of more than 8,000 cattle and 21,000 small stock.37
    • 5 feedlots.37
  • September Senator John Williams visits Scone abattoir at this point, it employs upwards of 700 people, plus ancillary positions.41
  • November 21. JBS Australia sign a A$1.45B conditional agreement to acquire Primo Group.2
    • Primo Group currently consist of –
      • Brand – Primo Smallgoods.2
      • Brand  – Hans.2
      • Brand  – Beehive.2
      • Brand – Hunter Valley Quality meats.67
      • Brand – Primo Quality Meats.67

Beef Central 27.11.2014. Hunter logo

Hunter Valley Quality Meats Logo Source  Beef Central 27.11.2014

  • 5 key abattoir, processing plants and distribution centres operating across Australia and New Zealand.2
    • Scone abattoir
    • Port Wakefield Pig abattoir
    • Chullora (Sydney) meat processing.52
    • Wacol (QLD) – Australia’s largest food processing facility.52
    • Carterton facility located New Zealand.67
    • 7 distribution centres.67
    • 37 retail outlets NSW Joes’s meat market and Farm fresh, are included in the sale.67
  • employ 3,000 people.2
    • Agreement is subject to customary regulatory approvals.2
      • As Primo is already 70% owned by an Asian fund Manager – essentially the deal is a sale from one foreign owner to another.44
  • JBS take over is consistent with the global strategy of Brazilian parent company JBS SA to grow its presence in value-added products.45
    • move closer to the end consumer.52
    • JBS don’t plan to make any significant changes to the Primo group operations for the forseeable future.52
    • Scone will be run under JBS’s southern program.67
    • remainder Primo group will be run as a stand alone business with 3,700 employees.67
  • Scone has greatly expanded its MSA kill in recent years.44
    • has brand names established.44
    • is located a large distance from other JBS plants.44

Beef central 27.11.2014.c

Freezer rooms in Scone abattoir Source Beef Central 27.11.2014

  • JBS is the the world’s largest processor of fresh meats.44
    • JBS takeover of Primo is the first major move of the red meat processor into the pork sector.45
    • JBS’s largest acquisition since Tasman Group.44
  • Australia’s cured meats and smallgoods markets worth $3B.46
    • most smallgoods manufacturing concentrated on the east coast.46
    • Industry has been plaqued by low profitability and volatile conditions that have contributed to significant consolidation over the past 5 years.46
    • Super market home Brands, Primo and Don have limited opportunity for growth in Australia.46
    • Pork production has a higher and faster protein conversion ratio than beef or sheep and may offer opportunities for high volume throughput and increased value adding.46
  • AMIEU is concerned Scone abattoir will increase reliance on overseas workers.47
    • AMIEU estimate only 140-150 of the current 500 workforce at Scone are local.47
    • 2,500 jobs have been lost in the Hunter region recently due to the Mining downturn.47
    • employers are seeking to engage 457 workers even when locals are unemployed.47
  • New Trade deal with China allows Chinese workers access through ‘investment facilitation arrangement’
  • Producers are concerned that the addition of 2 more abattoirs to the already powerful JBS network  will further reduce processing competition options.52
    • Primo takeover follows other mergers.52
      • Teys and Cargill – 6 abattoirs in NSW, QLD & SA.52
      • Sale of Country Fresh Australia’s NSW and QLD plants to Thomas Food International.52
      • recent smaller meatwork closures.52
    • Producers are concerned about the loss of independent kill options.52
      • Scone doesn’t provide service kill any more.52
        • Kills predominently for Coles.52
    • Concerned that the meat industry is moving to duopoly similar to the supermarkets.52
  • Producer experience of competition between abattoirs.70
    • “The efficent operation of an abattoir is 800-1,000km radius. Re the proposed acquisition of Scone abattoir by JBS. JBS own Dinmore. JBS will close Scone to improve economies of scale. If Scone closes; 40-60 dollars per head increased cost of transport for producers. Yet the ACCC has found that the Scone acquisition will not affect competition! But since July Primo at Scone was pulling cattle from up to 1,600kms. Jan 2015 Primo was paying $3.80 but JBS was paying $3.10. Primo was an important counter to JBS power” NSW Farmer.70
  • Speculation that JBS may on sell the Scone abattoir.52
    • JBS adament they will keep the abattoirs and invest in them
  • December.Beef industry participants call for declaration of the Upper Hunter region to be recongnised as a Critical Industry Cluster (CIC).53
    • acknowledgement of the importance of the local beef industry in that region.53
      • Thoroughbred and wine industry have developed CIC status’s.53
  • JBS envisage that Scone abattoir will become focal point for expanding JBS ‘Great Southern grassfed’ beef brand.54
    • opportunity to engage producers.54
    • Tasmania and Victorian producers receive premium prices for cattle that meet specific production and quality criteria.54
  • Port Wakefield abattoir is expected to be extended.54
  • NSW butcher shops will possibly be sold.54
  • Due to regulatory procedures JBS would not take over Primo and Scone abattoir until January or February.55
    • JBS wants to keep open communication with Scone public.55
      • intention to hire local employees and only others when necessary.55
      • 100 job increase announcement was decision of Primo but was consistent with JBS strategy to invest and grow in the region.55
  • JBS currently operate 12 meat processing plants across 5 Australian states67
    • Wages & local procurement $730M (Excluding livestock purchases)67
    • Employs 8,500 people at the facilities67
      • Employs 12,000 people in Australia67
    • Total revenue of $6.5B67

JBS plants 2014_edited-1

JBS processing plants in Australia

Source JBS submission #50 Market Consolidation.

  • JBS estimates its current share of four eastern states beef kill – 20% (excludes service kill)67
    • JBS share of Australian beef production 16%67
    • Market share of national small (lamb, mutton & goat) 16%
  • JBS spent $2.4M on halal certification costs of approved religious certifiers in 201467

2015

  • January. MLA forecast.78
    • Australian cattle herd has gone from 35 year high (2013) to 20 year low (2015).78
    • Australian cattle herd slip to 26.8M head by June 2015.78
      • by 2016 expected decline to 26.5M head.78
      • by 2020 27.9M head.78
    • Adult cattle slaughter expected to slump 15% year on year.78
      • 2015 to 7.8M head.78
      • 2020 expected 7.9M slaughter.78
    • Long term Female average in 2014 52%.78
      • Normally female kill percentage 47%.78
      • Only in years 1977, 1998 & 2003 has female kill been above 50%.78
    • Beef exports record levels in 2014 1.39M tonnes shipped weight.78
      • Expected to drop 20% to 1.3M tonnes in 2015.78
  • Labour Hire Company – Raying Holdings is found guilty of breaches of Fair Work Act.56
    • Fined for underpayment of 10 international workers $41,647.56
    • payments have been rectified.56
    • Raying Holdings has gone into liquidation.56
      • further 30 workers who are owed $150,000 would not receive payments due to the liquidation of Raying Holdings.56
  • Labour Hire person Zu Neng Shi also fined.56
  • Labour Hire company – New Bridge Trading, who also supplied Primo employees was being pursued in Federal court for owing 19 international workers $123,000.56
  • AMIEU claim workers at Scone have been underpaid for the last 3 years.56
  • Scone Primo supported action of Fair work Ombusdmen.56
  • February. ACCC will not oppose JBS’s proposed acquisition of Primo Food Group.57
    • ACCC received various submissions from a range of interested parties.57
      • Most expressing concern that the acquisition would result in less competition in the market for slaughter cattle in Northern NSW and QLD.57
    • ACCC determined that Primo were not a currently strong competitive constraint.57
    • JBS would continue to be constrained in the market due to alternative abattoirs and supermarkets.57
      • JBS’s other abattoirs were more than 500km from Scone.57
    • ACCC wary of the potential impact of further consolidation of abattoirs.57
      • Attached conditions to the sale.61
        • Scone abattoir must remain open and retain its capacity for consignment killings accesible by third parties.61
          • If JBS fail to do so the Treasurer has the power to order the company to divest itself of the meatworks.61
        • That JBS report to the Foreign Investment review board on its compliance every 6 months.61
        • Transaction is to be reviewed in 3 years time.61

Scone location

Approximate radius of 500km from Scone abattoir

Further mapping of current and historical Australian abattoirs can be viewed at
Australian Abattoirs google maps

  • NSW Senator John Williams says ACCC move was very disappointing and indicates ACCC is out of touch with reality.58
    • Cattle can easily be transported hundreds even thousands of kilometres.66
    • Requested Federal Parliament to update the competition laws.64
      • Current test for take-overs by ACCC are not tough enough.64
      • ‘Creeping acquitsitions’ occurs and is allowable.64
        • could lead to monopolies.64
    • ACCC made a decision that there’s not a ‘substantial’ reduction in comptetiveness of the beef market.65
  • Agriculture Minister Barnaby Joyce says conditions of the sale would ensure local cattle producers have certainty of access for contract processing.62
    • confusion surrounds interpretation of phrase ‘service kill’.63
      • some view as obligation that JBS provide service kill to others at Scone.63
    • Scone abattoir has for some time conducted a single service kill – Coles.63
    • Clarification by the Minister – Whatever arrangement that Scone facility had in place at the time of the sale is to remain.63
      • If Scone only had one contract and didn’t as a policy do others then they would not be forced to do more.63
      • would be expected to maintain custom killings in both a competitive and profitable manner.64
      • Minister acknowledged there were calls for stricter controls.63
        • warned chance that may have gotten less.63
  • Scone abattoir supervisor is sentenced after pleading guilty of aggrevated indecent assault.59
  • March. Finalisation of the sale of Primo Smallgoods to JBS Australia Pty Ltd.2
    • JBS has 100% share capital of Primo Group.67
      • Anticipates annual revenue from the Primo Business A$1.6B.67
      • annual pre-tax earnings A$150M.67
  • JBS operate as 2 divisions.4
    • Southern division.4
      • Processing sheep, goats, pigs and cattle.4
      • capacity combined process 110,000 small stock and 9,500 cattle per week.4
      • employs 2,500 people.4
      • Area having access to almost unlimited market access to worldwide meat and offal export markets.4
    • Northern division.4
      • 5 operating facilities.4
      • processes 1.4M cattle a annually.4
      • Employs 4,300 people.4
    • JBS also operated 5 feedlots.4
      • One time feeding capacity of 150,000 head of cattle.4
      • Annual turnoff of 330,000.4
  • Foreign ownership of Australian red meat processing facilities.
  • Nippon share_edited-1

    Share of Australian red meat processing

    Source The Stock Standard. VFF March 2015

  • Farmers rally is held at Barnawartha (Near Albury/Wodonga, Victoria) following February 17 saleyard boycott.60
    • Concerns over processing market competition.60
    • Lack of competition as two other abattoirs are currently shut down due to Cyclone Marcia damage in February 2015.89
  • June. Cost of processing in Australia 1.5-3 times the cost of processing animals in another country67
  • cost of processing grain-fed cattle in Australia is twice of the USA67
    • lower levels of productivity in Australia in regards to kg per unit of labour67
    • 2 major differences between Australia and the USA67
      1. Government regulation
        • $10 a head more in Australia67
        • Dept. of Australian Agriculture fully recover costs of meat export inspection and certification67
          • Australia wide DAFF costs $80M67
          • JBS contribute $14.5M67
        • Export plants don’t use DAFF but use approved employees, which plants fully cover costs67
          • JBS estimate an additional $30M at Export level67
        • USA & Brazil governments provide services at no or minimal costs to processors67
      2. Energy Costs
        • $15 a head more in Australia67
    • Technical barriers to trade (TBT’s)- Total value in Australia estimated at $1.25B as identified costs67
      • 261 TBT’s in 40 key markets67
        • 136 have significant trade distortion impacts67
    • July. The following charts are from a submission by the Australian government Department of Agriculture to the Senate rural and regional affairs and transport references committee inquiry into Market consolidation and the red meat processing sector.

NSW abattoir capacities Dept ag consolidation_edited-1

  • Capacity of major beef abattoirs in NSW. Pg 15

    T2 Throughput state beef_edited-1

    Share of throughput by state for beef in 2014. Pg 16

    T4 processing companies market share_edited-1

    Major Processing companies by market share May 2015. Pg 16

    M4 direct cattle movements NLIS QLD_edited-1

    Cattle Movements to abattoirs. Pg 25

    F12 hourly labour costs food manufacturing_edited-1

    Hourly labour costs for food manufacturing industry Pg 30

  • August. AMIEU found workplace conditions improved since JBS had taken over Primo.71
    • Local people are being employed ahead of foreign ones.71
  • September. Scone abattoir expansion plans require further explanation to the Department of Planning.72
    • JBS aim to more than double its kill to more than 55,000 units per week.72
    • beef boning room will be modified.72
    • new stock slaughter floor.72
    • Extra cold storage.72
    • Challenges in regards to environmental obligations, noise and vibration abatement, including odour impact on and off the site.72
    • Planning authorities have asked for wastewater and irrigation management plans.72
    • JBS have been told to consider local housing affordability to accommodate the increased workforce including demand on community services.72
  • December. ATO publishes tax data for agribusiness corporates.15
    • Data interpretation – Companies do not pay company tax on revenue (total income) they pay on profits after paying all expenses, including wages, capital replacement, supplier costs and other operating expenses.15
    • Income tax information is for 2013/14.15
  • JBS Holdco Australia Pty Ltd produced Total Income $4,040,948,610.15
    • Taxable Income $419,882,525.15
      • Tax Payable $44,809,334.15
  • JBS receive approval for upgrades to failed treatment pond currently at the Scone site.73
    • JBS have spent $3.5M in the last 4 and a half months to rectify issues at Scone.73
    • there are 3 existing anaerobic ponds, 2 need to be taken off line as they are full of sludge.73
    • Development involves establishment ov 100m x 50m burrow pit above existing clean water.73
    • JBS spoke to citizens at a small forum for local residents.73
  • Council approve application 131/2015, received 27/10/2015 to upgrade the existing pond facility at Scone abattoir.74

2016

  • January. Scone abattoir scales back operations.76
    • 155 workers, including 15 permanent local employees are expected to lose their jobs.76
    • moved from double to single shift.76
    • Various market factors have affected production.76
      • Australian livestock supply experiences a dip.76
      • job losses were expected across the board.76
    • JBS’s other plants at Dinmore and Rockhampton had been dropping shifts late in 2015 and were scheduled to shut 18/12/2015, staying closed for 5 weeks over the christmas period – 3 weeks more than usual.90
  • AMIEU would fight to protect the jobs of local workers.76
    • AMIEU requested  that permanent residents be given obvious preference.76
  • MLA forecast beef production to drop to 25.9M head in 2017.78
    • lowest in 24 years.78
    • Numbers had been forced down by drought.78
    • higher production with record turnoff to slaughter and live export.78
  • Rather than trying to maintain throughput at all costs, processors are making commercial decisions to wind back kills to match available supply.91
  • Some processors have scheduled ‘dark days’  – facilities will only slaughter on 2-3 days a week.91

 

 

Sources Scone (NSW)  – JBS

  1. AUS-MEAT Accreditation Listing 29.12.2015
  2. www.primosmallgoods.com.au. Accessed 28.01.2016
  3. APC Action Plan 2010-2015
  4. www.jbssa.com.au
  5. ‘5,000 jobs at risk: Abattoirs facing closure’ Sydney Morning Herald 21.05.1996
  6. ‘Fears for sight’ www.ammonia.com.au 23.12.2003
  7. ‘Recent beef production and management system trends in NSW’ NSW DPI 01.01.2006
  8. 2006 Top 25.
  9. ‘$15M abattoir fire devastates employer’ The Advertiser 24.02.2007
  10. 2007-top-25-processors
  11. http://mcinnescontracting.com.au/projects-before-and-after/
  12. NSW Parliament Questions 17.06.2008
  13. HACCP compliance September 2010
  14. ‘Abattoir worker dies after freezer roof collapses’ SMH 06.04.2011
  15. ‘Visiting worker dies at Primo Scone’ Newcastle Herald 06.07.2012
  16. Hunter Quality meats trademark details 12.09.2012
  17. ‘Closed Coonabarabran abattoir up for sale’ Northern Daily Leader 13.11.2012
  18. ‘Primo abattoir fined for gas fire’ The Herald 11.10.2013
  19. ‘IRC fines Primo Australia Scone abattoir for gas fire’ Tradesmonitor. 09.12.2013
  20. ‘Strike action at Scone abattoir’ Newcastle Herald 17.12.2013
  21. ‘Lederer given red card over Wanderer’s move’ Newcastle Herald 03.01.2014
  22. ‘Speculation of Wanderer’s sale premature, says chairman’ www.accessnews.com.au 14.01.2014
  23. ‘Working holiday visa workers being ripped off and harassed’ ABC 06.03.2014
  24. ‘Union alleges meatworkers underpaid’ The Land 07.03.2014
  25. ‘Court action over underpaid meatworkers’ Good Fruit & Vegetables 13.03.2014
  26. ‘Fair work cracks down on alleged underpayment of 10 abattoir workers’ www.smartcompany.com.au 13.03.2014
  27. ‘Primo abattoir embroiled in $41K underpayment case’ http://www.foodmag.com.au 13.03.2014
  28. ‘Court action over underpaid meatworkers’ www.farmonline.com.au 13.03.2014
  29. ‘Primo puts case in ad’ Newcastle Herald 21.03.2014
  30. ‘Meat firm puts case’ Newcastle Herald 22.03.2014
  31. ‘Abuse of holiday workers reaches Parliament’ AMIEU 24.03.2014
  32. Enterprise Bargaining agreement April 2014
  33. ‘Primo to expand’ Scone Advocate 26.06.2014
  34. ‘Forty million dollar Scone abattoir upgrade’ ABC rural 04.07.2014
  35. ‘JBS takes stake in Andrews Meat’ www.farmonline.com.au 09.07.2014
  36. ‘What’s behind JBS taking a big stake in Andrews Meat Value adding Businnes? Beef Central 10.07.2014
  37. ‘Pinoys take on abattoir jobs’ kalatas.com.au 12.07.2014
  38. ‘Scone’s Primo abattoir to get $40M upgrade’ Maitland Mercury 21.07.2014
  39. Senator John Williams Speech 30.09.2014
  40. AMIEU Meatworkers Journal Vol #69 Oct 2013. March 2014
  41. ‘Primo group sold to JBS for $1.45B’ Singleton Argus 21.11.2014
  42. ‘JBS to buy Primo in $1.45B deal’ Beef Central 21.11.2014
  43. ‘Bringing home the bacon: JBS buys Primo’ The Land 21.11.2014
  44. Brazil’s JBS buys Primo Smallgoods’ www.ausfoodnews.com.au 24.11.2014
  45. ‘Meatworkers union worried about reliance on overseas workers’ ABC News 25.11.2014
  46. ‘$1.45B Primo acquisition part of JBS’s big picture value-added strategy’ Beef Central 27.11.2014
  47. ‘Scone abattoir expansion’ ABC Rural 27.11.2014
  48. ‘Scone abattoir announces 100 new jobs’ ABC Rural 27.11.2014
  49. ‘Primo buyout raises concerns’ Stock Journal 28.11.2014
  50. ‘Call for critical industry cluster to protect Upper Hunter Beef Industry’ ABC News 02.12.2014
  51. ‘JBS reveals it’s market appetite’ The Land
  52. ‘JBS emphasises local commitment’ Scone Advocate 04.12.2014
  53. ‘Workers unpaid as labor hire company folds’ Newcastle Herald 19.01.2015
  54. ‘ACCC won’t oppose JBS’s acquisition of Primo’ Beef Central 06.02.2015
  55. ‘NSW Senator John Williams hits ACCC over Primo takeover’ Weekly Times 10.02.2015
  56. ‘Scone abattoir supervisor sentenced over assault’ ABC News 27.02.2015
  57. ‘Producers call for a fair go’ www.farmonline.com.au 02.03.2015
  58. ‘Joyce welcomes conditions on JBS/Primo FIRB approval’ Barnaby Joyce media release 04.03.2015
  59. ‘Hockey approves JBS take-over’ The Land 04.03.2015
  60. ‘Hockey approves JBS’s Primo buy, but with strings attached’ Beef Central 05.03.2015
  61. ‘Primo sale approved, with protections to ensure Scone abattoir stays open’ ABC News 05.03.2015
  62. ‘Primo sale highlights need for competition…’ ABC Rural 06.03.2015
  63. ‘Sale of Primo to JBS disappointing: Senator John Williams’ www.deluxecafemoree.com.
  64. ‘JBS concludes $1.45b Primo deal’ Beef Central 30.03.2015
  65. “JBS imports new boss for Primo’ The Land 31.03.2015
  66. sub50_JBS Inquiry into the effect of market consolidation on the red meat processing sector
  67. sub45_WangarattaVFF 28.06.2015
  68. ‘Union officials contend Scone abattoir sell off a boost for internal workers’ www.myexpress.com.au 08.08.2015
  69. ‘Scone abattoirasked for more information on expansion plans’ ABC Rural 25.09.2015
  70. ‘JBS lodges DA to fix ‘legacy’ issues at Scone abattoir’ Scone Advocate 09.12.2015
  71. council approval for works Dec 2015
  72. ‘ATO publishes tax data for agribusiness corporates’ Beef Central 18.12.2015
  73. ‘Jobs to go at Scone abattoir’ ABC News 27.01.2016
  74. ABARES foreign ownership 2011
  75. ‘MLA forecasts beef market adjustment’ The Land 27.01.2015
  76. ‘Slow season opening for processors’ Beef Central 11.01.2012
  77. ‘Caualties emerging as export kill pressure continues’ Beef Central 25.07.2011
  78. ‘Hunters meat axe’ Newcastle Herald 15.05.1999
  79. ‘TAFE signs deal with Scone abattoir’ Newcastle Herald 27.08.2002
  80. ‘Abattoir to beef up it’s numbers’ Newcastle Herald 30.04.2003
  81. ‘Feedlot future has abattoir concerned’ ABC News 16.04.2004
  82. ‘Primo accused over foreign pork’ Sydney Morning Herald 20.02.2008
  83. ‘Improperly labelled pork sparks probe’ Sydney Morning Herald 20.02.2008
  84. ‘Taiwanese meatworkers in Scone underpaid, encouraged not to pay tax, says union’ ABC News 07.03.2014
  85. ‘Big beef producer cuts deal with Tasman Group’ The Age 06.03.2008
  86. ‘Teys Australia abattoir kills for the first time since Cyclone Marcia’ ABC Rural 06.03.2015
  87. ‘JBS shuts north ALD plant several weeks early, extends closure of other plants as cattle supply dries up’ ABC Rural 26.11.2015
  88. ‘Weekly kill, Processors dropping shifts in preference to chasing cattle at a loss’ Beef Central 27.01.2016

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