The Australian Competition and Consumer Commission (ACCC) is set to hear from dairy farmers about a range of issues contributing to the poor state of the industry, including how farm gate milk prices are determined and dollar-a-litre milk.
Australian dairy farmers have said they are looking forward to telling the ACCC about the issues being faced in their struggling industry. The ACCC announced it would be holding forums around the country as part of its year-long inquiry into the dairy industry.
Gippsland dairy farmer Marian Macdonald said that for decades, milk processing companies had dictated the price farmers were paid for their milk.
“We just have to accept the price we’re given, whether that’s a high price or a low price, we have no control,” Ms Macdonald said. “At the end of the day, we’ve got this situation where the processors say ‘oh the deals that we strike with the supermarkets are none of your business, it’s commercial in-confidence’.
“And then they turn around and say ‘oh yes, but we’re not making enough money from our products, so therefore you guys will have to accept a lower milk price’.
“You can’t on one hand hold us accountable for their commercial decisions, but on the other hand not let us see what’s going on.”
‘Dollar-a-litre milk unsustainable for farmers’
The ACCC began its inquiry in November after Treasurer Scott Morrison asked it to investigate the dairy industry’s competitiveness of prices, trading practices and supply chain.
In a separate inquiry the ACCC has been investigating the actions of milk processors Murray Goulburn and Fonterra Australia, after the companies last year retrospectively cut the price paid to dairy farmers for milk solids.
As well as those cuts in milk prices, there are a range of issues contributing to the current state of the dairy industry.
There has been a sharp decrease in the world price Australian farmers receive for milk.
And last year there was also an oversupply of milk in the global market.
John McQueen, from the policy and advocacy group Australian Dairy Farmers, said there have also been domestic issues at play.
“This is an opportunity for the whole supply chain to be analysed by an independent authority, the ACCC,” Mr McQueen said.
“One thing that really does need to change and I’m sure the ACCC will demonstrate this, is that dollar-a-litre milk is unsustainable for a dairy farmers’ long term sustainability.”
“The supermarkets have to understand that the situation cannot continue in the way it has done.”
Industry secrets to be revealed
ACCC commissioner Mick Keogh said the inquiry was seeking transparency in the industry, and had been given special powers to do so.
“In announcing the inquiry that we’re talking about, the Treasurer conferred on it some mandatory information disclosure powers that are available under the Australian Competition and Consumer Act,” he said.
These powers will compel the participants in the industry that are asked by the ACCC to provide detailed information.
That means previously secret details about market share, margins, pricing mechanisms and international markets would be made public.
The forums are set to begin in Queensland in February, with the ACCC’s final report due in November.