Around 600 full-time staff at JBS Australia’s Dinmore beef processing plant, in Queensland, will no longer have work, as the company scales back operations “for the foreseeable future”.
JBS has cited a range of issues impacting livestock supply as well as market conditions amid the COVID-19 environment for the Dinmore scaled-back operation, which closed for a fortnight in late August.
“The market conditions mean there will be no work for around 600 full time jobs for the foreseeable future,” JBS Australia CEO Brent Eastwood said in his statement.
“However, the difficult but necessary action we’ve taken allows us to preserve a further 1150 full time jobs during this challenging period, while protecting the long-term future of our Dinmore facility and our other Queensland beef processing operations.”
"This is not a decision we have arrived at lightly. Already facing a severe livestock supply shortage following an extended period of drought, the COVID-19 crisis has significantly impacted the Dinmore business. The situation has been further exacerbated by the market inequity created by the Federal Government’s JobKeeper Program."
According to the The Australian Financial Review, the Dinmore facility is the largest meat processing site in the southern hemisphere, and pays $141 million in salaries and $18 million in payroll tax each year.
Eastwood said JBS was in the process of "engaging directly with our workers, alongside the relevant Unions with coverage on site, regarding the impact of the decision and we thank them for their constructive approach to those discussions which are continuing".
In Queensland, JBS has meat processing facilities in Townsville and Rockhampton, and are also facing financial strain.
Australian Meat Industry Council CEO Patrick Hutchinson told Food & Drink Business that the meat processing industry has some of the most expensive processing costs in the world.
"We continue to work with state and federal government/s on a range of measures that tackle our key input pains including regulatory costs and energy," said Hutchinson.
"So, in order to continue to pay record prices for cattle and pay record wages for staff (in comparable jobs in comparable countries globally) we continue to require strategic investment. This also goes to assistance in opening up trade as well as looking at efficiency dividends through research.
"Also, this in turn assists our upstream supply chain members including wholesalers and independent retail butchers, as well as farmer. Helping our industry helps the whole supply chain."
The red meat industry has continued to show its resilience, said Hutchinson, with a 30 per cent increase in domestic consumption of meat during the first national lockdown.
The latest State of the Industry report from Meat & Livestock Australia, released last week, also highlighted the industry's resilience during a challenging year, and found in 2018-19, domestic and export sales of red meat totalled $28.5 billion.