Export opportunities driving market plan

PERTH Market City, the main market for WA’s fruit and vegetables and home to 21 agents, could become home to just a single super agency.

The Perth Markets site hand-les between 60 per cent and 70 per cent of WA’s fruit and vegetables.

Agriculture, Forestry and Fisheries Minister Kim Chance said he saw a need for a single agency at the PMC that had the capacity to put together large consignments for overseas markets.

He said the sale of the Perth Markets was also under consideration. Such a move has become more likely with the sale last week of the Brisbane Markets for $74 million. Sydney’s markets were sold last year.

Mr Chance said a single market agency would help small growers pursue export opportunities.

“ At the same time it will help the large growers gain more of a foothold in the domestic market,” he said.

Most of WA’s major growers have succeeded in cracking the export market, but in doing so have left the domestic market to smaller growers.

Mr Chance said he had seen how the fruit and vegetable market performed in Indonesia.

“We’re looking to develop niche markets in both Indonesia and Singapore and we’re looking at the middle markets there. Those markets have largely been vacated to the

US and Thailand,” he said.

“To do that we need one major supplier and hence the need for a consolidator.”

Mr Chance said he had approached the Chamber of Fruit and Vegetable Industries to consider whether it would be able to put together some sort of concerted industry approach to solve the problem.

He is also asking the Perth Market Authority and the chamber to consider what the needs of the site would be in 20 years time.

Chamber president Grant Etherington said he was not aware of any proposals for the consolidation of the agents on the site but admitted Mr Chance had discussed greater cooperation among the agents on the site.

“Kim talked to us about a customer in Indonesia that wanted cheap produce and whether we could supply that need on an ad hoc basis,” he said.

“It’s not something I think anyone’s considered before and I’m not sure if it would be viable.”

Mercer Mooney director John Mercer said he would be opposed to any suggestion of consolidating the number of agents at the Perth Markets.

“We can’t compete on price in Indonesia. New Zealand, South Africa and even the US are cheaper than us,” he said.

“And what’s worse, the cost of production has gone up here. From August 1 the cost of a casual worker went up from $11.50 to $13.62.

“There is no money in the volume end of the market.”

Mr Mercer said he believed the recent sale of the Brisbane Markets would put pressure on the WA Government to sell the Perth Markets.

Mr Etherington said he thought any sale of Perth Market City would still be a long way off.

“We’ve suggested to government that, if the site is sold, we would favour industry to own it. That’s what happened in Sydney,” he said.

In Sydney the sale of the market site to the agents was a staged transaction over about four years. The agents first took over the management of their market site, which gave them experience in its operations plus some financial history that was later used to gain financial backing for their ultimate pur-chase bid.

WA Fruit Growers Association executive director Rob McFerran said a sale of the Perth Markets would be sup-ported by growers, providing agents’ rents remained constant.

“We don’t want any hardship for the wholesalers because they’ll pass their higher costs on to the growers,” he said.

The WA Government last year undertook a review, chaired by Muresk professor Murray McGregor, of the Perth Market Authority and the operations of the Perth Markets.

Mr Etherington said the laws governing the Perth market site were draconian.

The Perth Markets Act only covers the market site in Canning Vale. Agents using a site directly across the road from the Perth Markets are not covered by it.

“Kim Chance wants to rewrite the act and that’s something we support,” Mr Etherington said.

Mr Mercer said the McGregor review had done some good work.

“It identified that making the markets work meant changing the regulations that cover just the one site,” he said.

“However, we need to get away from the by-laws that [former Agriculture Minister] Monty House introduced.”

Those by-laws have proved controversial. Growers were happy with them but some Perth Markets agents were against using them because it was claimed they did not take into account modern marketing methods.

Mr McFerran said growers were happy with the way the review was progressing.

“There is no rush from our side. We just want to make sure the transparency of transactions with agents remains,” he said.

Mr Chance said the Perth Markets appeared to be operating well and that “everyone out there” seemed happy with the by-laws.

“The problem we have is the act that governs the site’s operation is virtually redundant,” he said.

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