Cut-throat milk war points to bleak future for fruit and veg growers

The Queensland Dairyfarmers’ Organisation (QDO) has slammed the Federal Government’s responses to the Senate Economics References Committee’s 2011 final report of the Inquiry into the impacts of supermarket price decisions on the dairy industry and Milking it for all it’s worth – competition and pricing in the Australian dairy industry as being pathetic. QDO President Brian Tessmann said that after more than 2 years of Senate Inquiries and clear evidence of mounting impacts on dairy farmers, the Federal Government is yet again avoiding the disaster, ducking for cover and taking no real action.

“The Gillard Government and more disappointingly Wayne Swan, as a parliamentary representative of Queensland, have turned their back on Queensland dairy farming families being impacted directly by the ongoing milk price war,” Mr Tessmann said “They have shown complete disregard for the future sustainability of the dairy industry that supplies Australian consumers with fresh milk and dairy products every day of the year.

“The Government has been repeatedly presented with clear and incontestable evidence that Coles’ marketing tactic is adversely affecting dairy farming families and action needs to be taken now.

“They’ve also been presented with clear evidence that in the long run there will also be a negative impact on consumers, via the experience of shoppers in the United Kingdom.

“The Coles lead milk price war has already impacted many Queensland dairy farming families and has contributed to the loss of some 30 dairy farmers from the industry in Queensland since January 2011.

“The next wave of impacts from the milk price war is now hitting farmers with some half of Queensland dairy farmers having their milk prices and incomes cut on average by some $30,000 to $40,000. This follows the other half of Queensland dairy farmers having their incomes slashed by 15 to 20 percent the previous year.

“These mounting impacts will put many dairy farmers into the red and will see more farmers leave our industry when we can’t afford to loose any. Already I know another five farmers have their herds booked for sale.

“We have been short of milk in Queensland this year and we need to produce another 100 million litres to meet the needs of our growing population of Queenslanders over the next decade.

“In the Government’s response quietly issued by Wayne Swan’s parliamentary secretary last Friday afternoon, they have failed to commit to the Senate Inquiry recommendation of a review into the impacts on the Western Australia, New South Wales and Queensland dairy industries and have chosen to pass the buck and hide behind the ACCC, which has time and again proven itself to be ineffective and powerless against the tactics of the major supermarkets

“For the Government to rely on the ACCC defies logic when we all know it does not have the necessary power to counter the tactics of these major retailers.”

During the Senate Inquiry the ACCC admitted in evidence that it had “not done any monitoring of the other items” in reference to the approximately 15,000 other items in a supermarket that Coles may be increasing the price of to offset the price cuts on staples such as milk and that they had not checked if Coles was selling below cost in regional areas.

“Even Coles’ major competitor, Woolworths stated a year ago that the price cut was unsustainable and would lead to farmers being impacted,” Mr Tessmann said

“The Federal Government continues to fail to recognise the difference between the export based states such as Victoria and primarily domestic consumption states such as Western Australia, New South Wales and Queensland.”

“The QDO again calls on the Government and all parliamentarians to support the dairy industry’s recommendation for an enforceable and mandatory Code of Conduct for supermarkets that covers the entire value chain, from farmer to retailer, headed by a Supermarket Commissioner or Ombudsman to investigate complaints and strongly enforce the new code.

“The cut throat price cuts are unsustainable and the plain fact is milk priced at 1992 levels does not bring in enough money to support farmers, processors and retailers.

“The dairy farming families – and also all Australian consumers who enjoy fresh milk and wish to continue to do so over the long term – deserve much better then the current complacency of the Federal Government. Action is needed now.”