QSL calls for true sugar industry competition

qsl23 October 2014 

Queensland Sugar Limited (QSL) Chairman Mike Carroll has called for the Queensland sugar industry’s marketing arrangements to be opened to competition, stating the purpose of deregulation was to dismantle artificial monopolies and create a market dynamic, not to replace statutory marketing authorities with private monopolies.

Speaking at the QSL Annual General Meeting, Mr Carroll said the Queensland sugar industry faced a situation where three milling companies – Wilmar, Mitr Phol’s MSF and COFCO’s Tully Sugar – were using their cane milling monopolies to force growers to use them to also market and price their raw sugar exposure.

“What these three milling companies are doing has parallels to employees and their
superannuation” he said.

“It is akin to saying that because I’m paying your contributions, you must use my
superannuation fund.”

Mr Carroll said that Super Choice legislation was introduced to create competition and similarly the sugar industry needed legislative intervention to create competition.

He said QSL did not advocate a return to sugar’s single-desk marketing approach (abolishedin 2006) and welcomed the opportunity to compete for the right to market grower’s economic interest in sugar.

“At QSL we believe the best outcome is not to revert to the past but to progress to the introduction of a competitive arrangement where growers can choose who markets their economic exposure,” he said.

“This would provide competition, allow markets to appropriate value along the supply chain, mitigate risk, encourage innovation and deliver the fairest outcome for all.”

Mr Carroll said QSL welcomed the Queensland Government, the Federal Senate and the Australian Competition and Consumer Commission’s investigations into the current Queensland sugar marketing impasse.

“There’s a lot at stake here,” he said.

“Only with a real say in their future will growers have the confidence to continue to invest in this industry, in which they have over $12 billion of capital invested, and which each year generates around $1.5 billion of export revenue.”

Mr Carroll’s full address is available on the QSL website at www.qsl.com.au.