ACCC gets message loud and clear

By Brian Tessmann, QDO President

Farmers at the Toowoomba ACCC Dairy Inquiry

Farmers at the Toowoomba ACCC Dairy Inquiry

Over 100 dairy farmers attended Australian Competition and Consumer Commission (ACCC) Queensland hearing in Toowoomba last week and around 200 dairy farmers packed the recent New South Wales hearing in Taree. The size of these turn outs shows just how frustrated and desperate dairy farmers are to see governments address the current market power imbalances plaguing the industry.

While dairy farmers primarily laid the blame on the major supermarkets $1 per litre milk for the gutting of value from the dairy supply chain they also took aim at other market power imbalances. High on this list was the lack of transparency in the industry value chain which resulted in difficulties when negotiating farm gate prices. Inconsistent and varying contract terms reduced farmers’ market options, including the ability to easily transition and change between different dairy processing companies, lowering farmers’ negotiation power.

Additionally, most milk supply contracts currently claim exclusivity of supply so farmers are unable to supply milk to a local cottage dairy manufacturers. These lost opportunities impact upon local communities and dairy farmers’ abilities to diversify their income.

There was widespread disagreement on the figures processors had been used for setting farm gate price when costing milk sourcing and transporting. Examples of this have played out in the ongoing Parmalat farm gate price negotiations.

At the end of the day the message was clear. It was the same message Queensland Dairyfarmers’ Organisation (QDO) gave at the Senate inquiry, that it’s time for both state and federal politicians to stop sitting on their hands and listening to the supermarkets and large milk processors. It is time to take action and give farmers the opportunity they have been crying out for, a fair go.

Listening to the heads of large companies only interested in short term corporate gain will only spell bad news for our dairy industry. It is time to give farmers the power to rebuild the Queensland and the Australian dairy industry otherwise consumers will no longer have access to local fresh milk.