Livestock export debt defended

Rueben HaleThe West Australian

One of Israel's largest slaughterhouses plans to defend a $680,000 debt it allegedly owes for a WA cattle shipment.

As exclusively reported by _Countryman _ last week, Melbourne-based Otway Livestock Exports managing director Alan Schmidt said his company had been in a dispute with livestock giant Bakar Tnuva since January.

He claims the Israel-based company short-changed OLE on a shipment of about 4000 head of cattle that sailed from Fremantle to Israel late last year.

In a writ lodged with the County Court in Victoria, the company claimed BT had either neglected, failed or refused to pay the balance of an outstanding debt for the shipment.

BT is a subsidiary of Tnuva Foods Agricultural Co-Op Israel Pty Ltd, a company that has a turnover of more than $8 billion and is the largest food and dairy manufacturer in the country, controlling about 90 per cent of the market.

BT's lawyers, KWS Legal, told _Countryman _BT planned to defend OLE's claim on a number of grounds, including on the basis of misconduct by the Australian exporter.

"Further, we anticipate that our client (BT) will file a counter-claim against Otway," managing partner Harriet Warlow-Shill said.

However, Ms Warlow-Shill said BT was unwilling to elaborate on the grounds supporting the company's counter misconduct claim against OLE.

Meanwhile, Mr Schmidt said he could only assume the BT counter-claim would relate to cattle that were purchased by OLE on BT's behalf and then subsequently sold to third parties, or that the final invoice amount for the cattle shipment was much higher that BT had anticipated.

"For our company to have acted with misconduct, we would have to buy the livestock at the prevailing market rate and then deliver them to BT with a hidden added margin on top of the purchase cost," he said.

"A couple of months ago we emailed transition and source documents to BT, which included vendor invoices, shipping and export documents, transport charges and fodder costs."

Mr Schmidt also said his company had sold cattle purchased on behalf of BT to third parties.

"The cattle that were sold were subsequently replaced with lighter cattle, which was BT's preference because they wanted to fit good numbers on to the ship," he said.

"The cattle we sold to third parties and when we received a higher margin than the agreed cost plus arrangement, the difference was credited back to the voyage.

"We did that with BT's knowledge and they were going to benefit."

Mr Schmidt said he believed the dispute with BT boiled down to their belief they were paying too much for the cattle. "Now we have situation where BT have received all the cattle in Israel and most of them have probably already been slaughtered and sold," he said.

A directions hearing is expected to be held in a week.

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