Today’s release of the competition watchdog’s inquiry into supermarket pricing lays bare the power imbalances, tactics and transparency issues faced in the Australian dairy industry.
Australian Dairy Farmers (ADF) says the Australian Competition and Consumer Commission’s (ACCC) inquiry shows more must be done to strengthen safeguards for dairy farmers, and the agriculture industry more broadly.
ADF President, Ben Bennett, said farmers are the most vulnerable participants in a supply chain dominated by big players.
“This report backs up what we’ve been saying for years – that the big supermarkets have increased their product margins over the past five years at the cost of our industry,” Mr Bennett said.
“With the exception of homebrand milk, which the big supermarkets use as a loss leader, we consistently see the retail price of dairy products rise. Yet, right now, dairy farmers are struggling to juggle high input costs with declining farmgate prices.
“The big supermarkets directly sourcing milk from farmers is further eroding market competition, compounding the issues our industry faces.”
Mr Bennett welcomed the government’s support for the report and called on leaders to adopt and enforce the recommended reforms.
“We also want the government to look beyond these recommendations and consider how they can ensure retail price increases flow to farmers. Government must also implement policies that promote local dairy products and counter the rising levels of cheap dairy imports.”
With one major supermarket now a dairy processor in its own right, and a review of the Dairy Code of Conduct underway, ADF hopes the government will seize the opportunity to strengthen provisions and protections for farmers dealing with processors.