Australia’s largest timber company has said that jobs losses will be the end result of an American company’s stranglehold on timber supply. Source: ABC News
Carter Holt Harvey said that the Hancock Timber Resource Group is charging too much for its logs, making Australian timber uncompetitive on the world market.
Hancock is the only supplier of wood to mills in Queensland and Victoria and is trying to acquire all of South Australia’s plantations.
Ian Tyson from Carter Holt Harvey told the ABC that Hancock’s pricing structure would eventually send sawmillers broke.
“We’re competing with imports, it’s now an open free-traded market and yet the fibre, the logs that we buy, we buy from essentially monopolistic organisations who price our logs on an ever increasing cost basis while in the market we’re continually reducing prices to be competitive,” he said.
“While our prices in the market go down, our log costs go up and so consequently we’re progressively squeezed.”
His concerns echo those made by Timber Queensland last week.
Both groups say the Australian Competition and Consumer Commission and relevant state governments need to investigate the company’s price strategy.
In a statement, Hancock says most contracts have adjustment mechanisms that allow it to change log prices in line with market conditions.
Hancock says it will continue to work with its customers to find sustainable solutions to their current trading conditions.
