Report shows devastating impact of supermarket price wars

Friday, 23 November, 2012

The impact of the supermarkets’ price war on milk has been confirmed by the latest AgTrends report, according to the Queensland Dairyfarmers’ Organisation (QDO). The QDO said the report shows the “ongoing and devastating impact” of the $1 per litre milk prices in Coles and Woolworths supermarkets.

While this won’t be news to Queensland’s dairy farmers, said QDO President Brian Tessmann, it should be a wake-up call for consumers and the government.

“The bottom line is that the supermarket milk war is creating a real threat to Queensland’s milk supply and for our state to continue to supply itself with milk,” Tessmann said.

“We have already seen some 50 farmers exit the industry since the milk war began and it is wrong that we could yet lose a lot more. The impacts are devastating and we are losing farmers we should not be losing, including progressive young farmers.

“Simply, milk at $1 per litre, despite the ridiculous claims from Coles to the contrary, is not a fair and sustainable price for fresh milk. It is having seriously negative impacts right through the supply chain to dairy farming families.”

The report said that half of Queensland dairy farmers aren’t sure that they will still be in the industry in five years’ time if milk prices and farm financial returns fail to improve.

Around 50 Queensland dairy farmers have left the industry since the supermarket price wars began; the QDO speculates that a further 40 dairy farmers could leave the industry this year due to low returns.

“This would be a devastating outcome for the industry and Queensland milk consumers,” Tessmann said. “Consumers can help by buying branded milk products, which represent a more realistic value of fresh milk.

“But it is crucial that the government step up and address these imbalances in the market. This means working with the industry on a compulsory code of practice and a supermarket ombudsman. Clearly, this report shows that action is needed and it is needed now.”

The full report is available from the Department of Agriculture, Fisheries and Forestry website.

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