Dairy farmers offer proposal to protect industry

The Queensland Dairyfarmers’ Organisation (QDO) has outlined a path forward that would allow the federal government to prevent farmers from becoming casualties in the retail milk price war and also deliver a sustainable milk value chain.

QDO President Brian Tessmann said that since Wesfarmers’ wholly owned subsidiary Coles started the milk war with $1/litre supermarket-brand milk on Australia Day, farmers across the country had been crystal clear about the impacts this would have on their industry.

“We are now setting out the solutions,” Tessmann said.

QDO is presenting these recommendations to Federal Shadow Minister for Agriculture John Cobb as he tours flood-affected dairy farms in south-east Queensland.

QDO has lodged 10 recommendations to the Senate Economics committee into the milk value chain, and outlined the steps for the government to ensure continued fresh milk production for Australian consumers every day of the year across the country and so that farmers are paid a price for their milk that is sustainable. These include:

• Establishing a mandatory Australian Drinking Milk Code of Conduct. This would deal with the complex relationship between farmers, processors, distributors and retailers.
• Appointing a commissioner to head the Australian Drinking Milk Code of Conduct.
• Having the government amend the legislation to strengthen the anti-competitive price discrimination provisions and to introduce a competition and sustainability ‘effects test’.

In addition, Tessmann said there was an urgent need for ACCC action to investigate Coles’ actions in the cost-cutting war, and this also formed part of the recommendations.

“Coles has continually implied that their unsustainable cost cutting would not impact on farmers,” he said.

“We can prove that this is wrong and Coles is being tricky with its promotion to consumers - milk cheques for many dairy farmers have already dropped in Queensland due to the milk war. We therefore believe there is a case for the ACCC to investigate the possibility of false, deceptive or misleading conduct.

“We also call on the government to direct the ACCC to immediately investigate whether Coles has breached section 46 of the Competition and Consumer Act in relation to predatory pricing.”

Tessmann said while we need the current unsustainable cutthroat discounting and devaluation of fresh milk to stop we also need long-term sustainable solutions. As such, the dairy industry is presenting realistic solutions to the government.

“We need action from the federal government. From what we’ve seen at the Senate Inquiry, the Coles executives have dug their heels in, so it is now time for the government to stand up for farmers and consumers and get this problem resolved once and for all.

“Government action is in the best interest of farmers and communities. It will also be in the interest of consumers in the long run, especially in drinking milk in states such as Queensland.”

Tessmann added that he believed there was strong community support for branded milk and the dairy industry.

“We appeal to consumers to continue to support the industry by choosing branded milk products, such as Dairy Farmers, Pauls and or Norco. Branded milk is sustainable milk, and that’s the best outcome for everyone.”