Gunnedah

Located north east of Wagga Wagga. Originally Gunnedah was a service abattoir owned and operated by the local council. It increasingly developed serious debt problems and received a number of assistance packages from Federal and state government to maintain operations. Sold to private enterprise in 1996 it only operated a very short time before permanently closing in 1997.

Other Names

Current Operation

• Closed 1997.³

Location   

• Gunnedah is located in northern NSW, approximately 550 km north of Sydney
  

Hema Maps – Australia Truckies atlas.

Owner

• Gunnedah Shire abattoirs¹
  • Manager Ray Grout¹
• Edmonds Meat Exports³ (1996 – 1997
  • Manager Peter Spackman³

Operation   

• Export abattoir¹

History

1957

• Gunnedah abattoir established.⁴
  • One of four strategic local government abattoirs⁴
    • Goulburn (NSW), Wagga Wagga and Dubbo (NSW)⁴
  • Set up by state government to boost local employment and offer processors and producers their own regional selling centre.⁴
  • Gunnedah was the most successful and once described as the shining light of the meat processing industry⁴
  • At its peak the abattoir through service operators had 600 employees.⁴

1994

• One of Australia’s biggest export abattoirs¹
• April. Ray Grout gave notice of resignation, council accepted but then Ray Grout wanted his job back and it was refused.¹
  • Ray Grout won the right for reinstatement as Gunnedah abattoir manager then changed his mind¹
    • claimed $100,000 damages.¹

1996

• April. Facility had soaked up $1.8M in council support since 1993²
• Currently employs 200 people²
• Fallen on hard times⁸
  • partly due to effects of extended drought in northern NSW⁸
  • abattoirs lack of meat industry experience⁸
• Delivers $150M into the regional economy each year.²
• Report conducted by Price Waterhouse findings²; to determine the role the abattoir played in the regional economy and to see if there was any hope of returning it to profitability⁸
  • Recommended abattoir be corporatised and assets transferred to a seperate legal entity⁸
  • Independent board with meat industry experience⁸
  • abattoir to be sold at any reasonable offer or closed if the business remains unviable and sale is unlikely within 2 years⁸
  • package of state and Federal government assistance⁸
  • Acknowledged plant was uncompetitive²
    • • but could be salvaged under new management if it corporatised for preparation for sale within 2 years.²
      • Federal government received  $1.25M in quarantine service fees and $2.5M PAYE each year²
• State and Federal government deal to prop-up facilities operations.²
  • $2.1M. in total²
    • $1.1M. exemption from payroll tax and stamp duty²
    • $1M. Quarantine and hygiene inspection costs pickup up by Commonwealth.²
    • Gunnedah was the most strategically placed in eastern Australia²
    • Gunnedah was one of only 5 abattoirs licensed to export to the 5 key export regions²
• Describing the problems at the abattoir² as an
  • “example of everything that is wrong in Australia’s meat industry” – John Carter, Former head of NSW Meat industry authority.²
  • “The situation at the Gunnedah works is indicative of the endemic problems that seriously threaten the competitiveness of Australia’s second largest export industry” – John Carter.²
  • “Last week Australia utilised just 69% of its killing capacity compared to the US, which was working at 200% by doubling its shifts – and we wonder why we are failing to compete” – John Carter.²
  • “200 abbatoirs must be cut to around 50 if we are to be competitive” John Carter²
• May. $1M assistance package is put in place.⁶
  • $1M over a 2 year period by state⁸
  • Federal government gave some concessions on quarantine and inspection services⁸
    • Council implement recommendations of Price-Waterhouse report – included appointing a new board.⁶
      • Greg Upton – Grazier and Chairman of North west electricity⁶
      • Jason Strong – Chairman of the Cattleman’s union and National livestock marketing board.⁶
      • Authors Note – Not sure if this is the same man. Jason Strong appointed Chief Executive of Australian Agricultural Company in 2014⁵
    • 4 companies have approached council about establishing operations in Gunnedah⁶
      • included on of the worlds largest corporations.⁶
• Up to half of NSW 56 abattoirs could close with the loss of up to 5,000 jobs⁷
  • abattoirs are outdated and inefficent⁷
  • Long awaited restructuring of the state’s meat processing sector needs to occur and has begun⁷
  • Beef export abattoirs at Wingham (NSW), Mudgee (NSW), Gunnedah (NSW) and Inverell (NSW) are most at risk to close⁷
  • Small number of modernised plants likely to survive restructuring Young (NSW), Cootamundra (NSW), Gundagai (NSW), Culcairn (NSW), Harden (NSW)⁷
  • Handful of efficient and niche market operators insulated from fall out Casino (NSW), Macksville (NSW), Scone (NSW) and Lismore (NSW)⁷
  • New privately owned and speciality sheep plants such as Goulburn (NSW) and Dubbo (NSW) killing 60% of NSW mutton are examples of what can be achieved by investment in capital⁷
  • Increased US beef into previous Australian market share in Japan, Korea and Taiwan increased pressure⁷
  • Live export of 500,000 cattle to Indonesia and Philippines increased pressure on operations of beef abattoirs⁷

  Authors Note – Majority of live export cattle during this period would have been Bos Indicus or crosses to South East Asia markets, sourced from mainly northern Australia. Not animals suited to heavy slaughter in Australia and from herds whos’ production was not likely destined for abattoirs in NSW.

• • Source – Live Cattle Exports. Australian Commodities Vol 5 #2 June 1998

   Chart showing the high volume of South East Asia live cattle export destinations period 1990 – 1998

• State government concessions designed to prop up the ailing Gunnedah abattoir were hastening their demise.⁷
  • forced other abattoirs to compete with inefficent works being handed unfair trading advantage⁷

  December. Abattoir sold to Edmonds Meat Exports.³

 

 1997

• April. Plant offically reopened.⁸
  • Record kill levels 30% above council management⁸
  • Hope new abattoir will expand into sheep, pigs with a view to new exports in Europe⁸
• Other retailers have set up in Gunnedah – McDonalds.⁸
• Turkish investor is interested in Gunnedah tannery for purchase and expansion⁸
• Abattoir now has $10M debt.⁸
• 370 workers put off³
  • mostly casual staff³
  • Not sacked , when market improves would endeavour to re-employ³
• Plant was paying more for cattle but getting less for product  when it was sold overseas³
• Companies decision was inevitable and would have come even if the meatworks was not privatised³
  • had been expected for a while due to conditions in the industry³

Sources

1. ‘Legal dispute over dismissal or resignation’ Sydney morning herald. 23.11.1994
2. ‘Call to Scrap $2.1M abattoir rescue plan’ Sydney morning herald. 08.04.1996
3. ‘Abattoir shutdown a jolt for Gunnedah’ Sydney morning herald 14.10.1997
4. ‘A giant in the life of Gunnedah – 100 years since O’Keefe born’ Namoi Valley Independent 23.10.2012
5. ‘Strong happy to shoulder the load’ Stock and Land 24.04.2014
6. ‘Gunnedah shire abattoir’ Parliamentary Hansard, 14.05.1996
7. ‘5,000 jobs at risk: Abattoirs facing closure’ Sydney morning herald. 21.05.1996
8. ‘Gunnedah shire abattoir’ Parlimentary hansard 17.04.1997