Cutting Edge

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-By Kristy Attard

‘We have had enough!’ That is the current catchcry in Australia and around the world at mega corporations wielding too much power in the marketplace. People are coming together to take back control, and Warren McLean, General Manager at Master Butchers Co-operative Ltd (MBL) agrees. “I believe around the world there is now movement back to the co-operative type ethos where large groups of people are effectively banding together into these types of organisations to give them purchasing power or selling power, marketing power.” It is the International Year of Co-operatives and MBL is proud to still be going strong after 107 years. “We exist to add value to our members’ businesses by giving them competitive purchasing and to be an economical recycler for them.”

Relevant Today

Why is MBL the last remaining butchers’ co-operative in Australia? “The main reason, I believe, is we’ve remained relevant to the needs of our customers who are also our owners,” says Mr McLean. “We don’t compete with our own membership base so we don’t sell meat, we simply supply merchandise.” Members of MBL consist of abattoir operators, boning room operators, supermarkets, retail and wholesale butchers, smallgoods manufacturers, chicken and seafood processors, retailers and wholesalers located mainly throughout South Australia, Northern Territory and Western Victoria. “We’re the epitome of an organisation that gives some power, some advantage back to our members… we aim to give them very competitive purchasing power or purchasing price where they wouldn’t be able to obtain those sorts of prices in their own right, they’re too small.”

MBL supplies an extensive range of everything its members need to do business, everything from food ingredients like salt and spices to knives and protective clothing. The products MBL does not supply are meat, chicken and seafood. “Our membership base, they’re in the meat and protein business so we don’t compete with that.” The other part of the business is waste recycling. “We are the only available option in South Australia for our membership to economically recycle their waste.” If MBL did not have a waste recycling facility members would have no other choice than to pay a large price to have their waste removed. “We add value back to their businesses by recycling their waste and actually turning it into money rather than charging them to take it away. We’ve remained extremely relevant as a result of doing that.”

Innovative Changes

Last year MBL spent 6 million dollars upgrading its recycling plant into a state of the art facility turning waste into returns for our members. The plant is now capable of processing greater volumes of waste from the chicken industry. The innovative technology used can recycle all waste animal protein into meatmeal and tallow or oil products. Overcoming one particular processing problem has been a step forward for MBL – neighbours were complaining about the smell that came from the plant. Recycling plants for waste animal protein and fats generally smell unpleasant. The solution? Installing an odour containment system. Mr McLean likens the system to a massive range hood and it is a fascinating process. “You put collection points over the tops of all the sources of odour and then you funnel that into a very large pipe with an induction fan and pass that through a bed of what looks very much to most people like compost and soil. That soil is damp and there are microbes living in there. You keep the soil damp and by pumping the odorous air through that bed – it’s about two metres deep – when the air comes out the top the odour particles are left in the bed, to be consumed by the microbes, and fresh air comes out the top.”

Waste protein and fats are not permitted to go to landfill because they do not degrade properly. Offensive odours and vermin are other associated problems. “Recycling animal protein waste is both environmentally sound and profitable. The end products have a value and are in demand by the aquaculture, pork and chicken industries to be used as feed ingredients.”

MBL makes products called meatmeal and tallow from recycling animal protein waste. Feathers are turned into feather meal and slaughter blood becomes blood meal. These products are sold to Australian feed mills and traders who trade them overseas to various markets in Asia, America, Canada and China. China purchases a large amount of tallow. “Tallow always has solid demand because tallow nowadays is part of the world oil market. Animal oil, vegetable oil and mineral oil are all now just simply commodity oils by the advent of biodiesel because all three can be used to make diesel.”

MBL has a total commitment to the health and safety of its staff and the high quality of its products. In terms of health and safety, there has been a recent evolution in Australian businesses; what people may have done a decade ago is, in many circumstances, completely unacceptable today. MBL has responded to these changes by employing people who can not only develop quality systems, but also health and safety systems to meet with current requirements. Identifying and fixing hazards has been an important step forward at MBL as well as training employees to work in a safe manner. The aim is to ensure that people understand what their responsibilities are and can identify and report hazards. In part due to this rich safety culture, MBL boasts high staff retention, with many of its 103 staff having spent many years with the organisation. Mr McLean comments, “Having properly trained staff who are happy in their job and know their jobs well are absolutely vital to any successful business.”

Power Play

Mr McLean himself joined MBL in 2004 as the Chief Financial Officer. When it comes to the two supermarket giants Coles and Woolworths, he believes they have the marketplace at their mercy and co-operatives are the answer. “I have a thorough understanding of commercial reality and they are quite simply very large organisations who are using their scale to contain costs and also their buying power to control what they pay for products. In other words, they have a disproportionate amount of power when you compare them to the rest.” How many small businesses, many of them family run, have shut their doors as soon as a Coles or Woolworths opens up nearby? Woolworths in particular has a reputation for being quite ruthless with farmers and manufacturers. “That is a worry, I believe, for the stability of commerce in general throughout the country.”

Co-operatives help even out the playing field by putting power back in the hands of consumers and manufacturers against conglomerates and industry heavyweights. “It’s the old ‘strength in numbers’ thing and I think particularly here in Australia… people are sick of very large corporations having too much control, effectively over their lives and over where a lot of their money is spent.” There is a movement toward modes of business like co-operatives which is steadily gaining momentum. Co-operatives may seem like underdogs of the business world but do not underestimate their strength. Many people fail to realise that a number of highly successful organisations around the world are co-operatives. Even the Australian government did not realise the true size of co-operatives in this country until MBL brought it to their notice a few years ago. “When there was a large pool of money available in grants under the ‘Retooling for climate change’ scheme, co-operatives were ineligible to apply, until we brought it to Canberra’s attention that we exist. Try telling NSW Sugar Milling Co-op or Murray Goulburn Co-op or Capricorn Society in WA, that they are not significant enough because they are co-operatives” (who incidentally have a combined turnover of over $2 billion).

MBL is planning for a prosperous future and is making confident strides forward. The organisation is looking at opportunities to sell and source more products that will then be supplied to its membership which is one and the same as its customers. MBL is currently in the process of purchasing a larger warehouse and recruiting new people with fresh ideas. Speaking of fresh ideas, Mr McLean has an interesting idea to share with readers. “There is a very ‘here and now’ opportunity – and all it would take is for manufacturers and the population to get behind it – whereby a people’s co-operative could be established that would give some advantages to the person off the street in buying power. It would give a lot of advantages to Australian manufacturers or Australian owned importers and give them a viable extra option to sell their products. Some of the most significant partners in our business are our suppliers”

It seems like just about every week there is a news story about how the supermarket duopoly is sending farmers and manufacturers broke while imposing massive mark-ups on groceries. Establishing a people’s co-operative could well be the way of the future in Australia.

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

September 19, 2018, 2:06 PM AEST