THE decision by Coles to ban hormone growth promotant (HGP) beef from its shelves in 2011 could have a massive impact on the WA beef industry, especially if the move is adopted throughout the retail industry.
Currently the retail giant buys about 350,000 beef cattle a year.
Coles claims it had become aware of consumer concerns about additives in food and livestock and animal welfare practices
According to WA Lot Feeders Association (WALFA) vice chairman Trevor Hinck, HGP is widely used in the WA feedlot industry and also in some grassfed beef operations.
Mr Hinck said Coles' decision could have massive repercussions for the WA beef industry right throughout the supply chain.
"There have been meetings and consultations with Coles about this issue but they have adopted a model that they think will give them an edge in the market," Mr Hinck said.
"We're concerned that it may set the standard so there won't be any bonuses for HGP-free beef, because it will be the benchmark.
"That's fine, but if we have to operate as an industry without that efficiency tool then we need to be compensated."
Mr Hinck said that compensation would need to be about $50-$60 a head in lost production, but questioned where that money would come from.
He said beef prices had not risen at a farmgate level for about 20 years, so producers had increased their efficiency to remain competitive.
The use of HGP increases feedlot efficiency by 10-15 per cent, so in removing that tool, it would become much harder to run a profitable enterprise unless the market was prepared to pay more, he said.
"Looking at the European and UK model, which is where this decision has been driven, there is no HGP beef but if you've ever eaten beef over there then you'll know it's completely different," Mr Hinck said.
"It's older and it is a lot more expensive.
"Is that what the Australian consumer is prepared to pay for?"
Mr Hinck said using HGP was not necessarily about faster turnoff of cattle, but it related more to the type of cattle that was entering WA feedlots.
For example, he said yearling cattle had quite adequate production figures without the use of HGP but because WA did not have an established backgrounding industry, the cattle entering feedlots were younger.
"Our animals are more immature over here," he said.
"Looking at the EU and UK model, cattle don't go into the feedlot until they are 2 to 2.5 years old.
"For us to do that, we would need to change our entire system from the day we buy from our cow-calf producers and then we would run into other market influences such as competing with the live export industry.
"We are not dead against HGP-free beef if that's what the consumer wants and it's not a marketing ploy.
"If that's genuinely what they want then we need to adapt, but we can't go broke adapting."
Coles general manager of meat Allister Watson said Coles would absorb any additional production costs that arose from moving to HGP-free beef, but on-shelf beef prices would not be affected by the move.
Mr Watson agreed with figures put forward suggesting his company could lose $20 a head in foregone boning room yield and $30-$35 a head in lost liveweight gain productivity as a result of its decision.
Given the company's weekly national kill of around 6000 head, the difference between implanted and non-implanted stock would equate to a potential weekly productivity loss worth at least $300,000.
While that was a big financial sacrifice, the policy change did make a "huge difference" to the eating quality of the product, Mr Watson said.
"We started a quality improvement program 18 months ago and HGP is just one of the aspects we've looked at. It's not just about HGPs in isolation," he said.
"This is a specification, no different to a spec that we might put in place for our chicken supply.
"We're looking at things from our consumers' perspective, and we believe HGP does have a quality impact when cattle are grown to the size and weight which we are looking for.
"Customers in all supermarkets, not just Coles, still have a perception that beef in supermarkets is not as good quality as it should be.
"We think this move can help change that."
Coles' major supermarket rival, Woolworths, confirmed it had no problems with the safety or eating quality of beef produced with assistance of HGPs and it wouldn't follow its competitor's move to ban such lines.
Woolworths said it did not want to "dictate how producers run their businesses".
Woolworths would not take a stand against HGPs because such a move would "ultimately add to the costs of our suppliers", among other reasons, said spokesperson Luke Schepen.
"The Coles decision is contrary to what the industry thinks and knows," Mr Schepen said.
"We have had extensive consultation with beef producers and others in the industry and support and trust their production expertise.
"We stand behind our high quality, nutritious and well priced beef products."
