Industry Action Shows Results

By Ross McInnes, QDO Vice-President

Recent data released by Dairy Australia shows a dramatic rise in branded milk sales in supermarkets across the country for the last 3 months. Prior to the Murray Goulburn and southern milk crisis in May, branded milk sales were about 34 percent of the market (see graph).

Following widespread coverage of dairy and farmer rallies around Australia, consumers voted positively in the dairy aisles and branded sales surged to 49 percent. This initial surge waned, but it’s important to note that sales stayed at 46 percent for all of July.

To put this into context, branded sales across Australia in 2010 were 43 percent, so the efforts of many individuals and farm organisations to highlight these issues have been extremely effective and beneficial to the processing sector. Queensland data shows all mainstream brands have been beneficiaries of this move with average volume brand sales for June 54 percent higher than April.

Dairy Australia also stated that per capita consumption of fresh white milk has not increased as a result of the $1 milk pricing policy introduced in 2011. This aligns with statements that Queensland Dairyfarmers’ Organisation (QDO) has been consistently making for the last 5 years. It also clearly debunks the claims by particular retailers that by discounting private label milk it would increase overall consumption and have in a positive impact on dairy industry’s profitability.

While the recent increase in branded sales are encouraging, consumers will only keep buying if they believe the benefits are getting back to farms. The message needs to remain clear and simple, the purchase of branded milk translates directly to support for our dairy farmers. Any news that farmgate price may drop despite the recent increase in branded sales will send a very confusing message to consumers. Our industry, farmers and processors, cannot risk breaking the recently strengthened bond of trust with consumers. QDO would be extremely disappointed if any Queensland processors looked to compromise this bond for the sake of any short term financial incentive.