TNAG-1614-FCO40-2222-Executive-Council-of-Hong-Kong-memoranda-and-minutes-of-meet-1987 — Page 23

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Handling Centre, and the Ma Tau Kok Cattle Depot and animal pier to be closed, all of which would almost certainly have to be retained if an Open Tender procedure was used since it seems quite impossible to close these without the Hong's active assistance, as they are central to the Hong's marketing role. There would appear to be little merit in tendering for free competition if this is already conditioned by a real monopoly on the supply of animals especially when the Hong has indicated a willingness to help the Government in tackling the problem of staff redundancy.

19.

It should be noted that an Open Tender has already. been tried, and shown to fail, at Sheung Shui. There a slaughterhouse site was put out to tender. Although several international slaughtering companies expressed initial interest, none actually bid - deterred by the impossibility of export of meat products from Hong Kong to third countries (if for no other reason, China would not export animals to Hong Kong for processing and re-export, but in fact also neither USA nor EEC will permit imports of meat products where the animals are reared in jurisdictions other than the territory of slaughter), the difficulty of supply unless the operator had the Hong as a partner, and the problematic attitude of the retailers. Sheung Shui received only two bids : one from a Kwangtung provincial agency whose bid was (effectively) conditional on the Hong Kong Government legislatively handing the Hong's monopoly over to the agency, and from a routine consortium of local retailers supported by the Hong. failure of the Sheung Shui tender to produce any realistic bids other than the retailer/Hong group is in itself sufficient to cast real doubts over the viability of Open Tender in this

field.

Summary

20.

is

The

The existing situation gives effective control of the the Council's retail price of fresh meat to the Ng Fung Hong : control of the urban abattoirs could only marginally influence the retail price. The Hong behaves responsibly with its

in its Own interest to have a existing monopoly because it stable demand, because there are alternatives to the Hong's supply if the Hong upsets the present stable pricing ratios, and because of the Hong's necessary and close relationship with retailers. Privatisation in the context of the Hong's restructuring proposals would not markedly increase the Hong's control over the retail price, nor would it weaken the controls

It which influence the Hong's present responsible attitude. would, however, obviate the disputes and tensions any other solution would give rise to, and allow a cleaner sweep of animal handling from Kowloon.

A Scheme of

Control over

slaughtering fees is possible, but pointless, and Open Tender is unlikely to produce in fact the advantages which theoretically it should. The Hong's restructuring proposals if implemented, would, in other words, produce little change in the present position as far as the consumer is concerned.

Municipal Services Branch

MSB(CR) 4/2/16

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