The peak body of the Australian beef industry has addressed declining domestic consumption by initiating the Meat Standards Australia (MSA) Eating Quality Standards grading scheme. The presence of a grading system can be interpreted as providing information to the marketplace. The value of providing reliable information provides benefits to consumers where there is a higher probability that the product consumed will meet expectations. In the absence of information, consumers must rely on their own search devices. In the case of beef, consumers have opted for protein substitutes. MSA aims to provide the consumer with information on beef in an effort to halt and possibly reverse recent falls in beef consumption.
The gains associated with information provision can be measured using a framework based upon that developed by Kinsey et ale The allocative gains associated with the MSA grading system have been estimated in this thesis to range from $73,941 up to $317,904 in south-east Queensland. The gains are considered to be limited but it must be borne in mind that only 3% of beef is graded by MSA in south-east Queensland. Given that over $20 million will be spent on MSA by 2001, the industry is at a crossroads and must determine whether MSA should continue.
Trends in beef consumption will be the true measure of success of MSA and this will not be apparent over the short run. Until MSA has completed extending the system to its target markets (Queensland, New South Wales and Western Australia), it is difficult to be certain as to the impact MSAhas had on consumers at a national level.
The MSA framework has undergone extensive development and testing and is considered by the industry in general as providing a product that is sought after by consumers. Its success will be dependent on a number of critical factors: reliability, consistency, recognition and differentiation of MSA product from substitutes. If all or one of these factors is absent, MSA's future must be questioned.