Australian Dairy Farmers (ADF) has applauded the competition watchdog’s pursuit of the questionable pricing tactics used by the big two supermarkets, on the same day Woolworths shaved another 5c/litre off the cost of its homebrand milk.

“What we’ve seen with the ACCC taking action against Coles and Woolworths is a clear signal that the powers of these supermarkets is too great,” ADF President, Ben Bennett said.

“Coles and Woolworths must understand that these moves, on the back of processors reducing prices to farmers, have real-world consequences for rural communities and the future of Australian dairy production.

“Decisions like this are not made in a vacuum. The reduction in milk prices may seem trivial to consumers, but for dairy farmers, it can mean the difference between staying afloat or shutting down.”

Woolworths cuts homebrand milk prices

ADF strongly condemns the decision by Woolworths to reduce milk prices by 5 cents per litre – a move that directly threatens the viability of dairy farmers across the country.

“This price cut undermines the long-term sustainability of the dairy industry and shifts the burden of cost savings directly to the backs of hardworking farmers,” Mr Bennett said.

According to the latest forecasts from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), milk production values are already expected to fall by $570 million to $5.5 billion, with most of this decline reflecting reduced farmgate milk prices.

“In no other industry can a pricing decision by management wipe half a billion dollars in value from an entire sector—most of which is directly tied to the returns that farmers receive,” Mr Bennett said.

“Such actions put immense pressure on our dairy farmers who are already grappling with rising costs of production and unfavourable weather conditions.

“These decisions have been made by major retailers and processors without adequate regard for the broader industry implications.”

Media release
Monday, July 29, 2024

Australian Dairy Farmers (ADF) has today welcomed Australia’s new Federal Minister for Agriculture, the Hon. Julie Collins MP.

ADF president, Ben Bennett, said he was pleased to welcome a Minister from a strong state for agricultural production, including dairy. “We appreciate Minister Collins’ acknowledgement of the vital role that agriculture plays in our country,” Mr Bennett said.

“The Australian dairy industry is the third largest agricultural industry in Australia and dairy farmers are world leaders in quality, innovation, and sustainability, producing milk and dairy products that are in high demand both domestically and internationally.

“However, the dairy industry faces serious challenges, including the ongoing issues of profitability, sustainability and regulation. Those challenges require strategic policy support and robust collaboration between government and industry stakeholders.

“We look forward to working collaboratively to address the challenges and harness the opportunities ahead.”

Mr Bennett said ADF was inviting the Minister on a farm tour, providing the opportunity for her to engage directly with industry experts and local farmers, witness firsthand the innovative practices that make dairy a global leader and discuss the issues impacting the dairy sector.

Long-running talks between Australian Dairy Farmers (ADF) and the Victorian Farmers Federation (VFF) have failed to resolve a dispute over the non-payment of $500,000 in member fees by VFF, ADF has announced today.

“ADF has been very patient over the past 12 months. ADF has endeavoured to pursue a resolution via negotiation, yet the parties are too far apart. It has become apparent that the only way to resolve this matter will likely be via court action,” says ADF President Ben Bennett.

“The ADF Board considers it has a fiduciary duty to the organisation, to ADF’s other State members, and to dairy farmers themselves, to pursue an outstanding debt that has been unreasonably withheld.

“Farmers should be aware these are dairy farmers’ levies that have been collected by VFF on the grounds they would be remitted to ADF but have been unjustifiably withheld by VFF.

“Not only has VFF withheld these funds, but the dairy farmer members of VFF, the United Dairy Farmers of Victora (UDV) themselves, have continually requested that VFF remit these funds to ADF.

“It is unfortunate to find ourselves in this position and while ADF remains open to finding an amicable resolution, ultimately we must resolve the matter once and for all and move on for the good of dairy farmers and the industry.”

Victorian dairy farmer Ben Bennett was appointed President of Australian Dairy Farmers (ADF) and Chair of the ADF Board, at a meeting of the ADF Board and National Council today.

Mr Bennett has been a Director of the ADF Board for the past two years. He farms in south west Victoria and has 13 years’ experience in management roles in the meat industry in Australia, New Zealand and India.

“As President, I fully realise there are challenges ahead for the dairy industry,” Mr Bennett said.

Mr Bennett paid tribute to outgoing President Rick Gladigau, who withdrew his nomination. Mr Gladigau will remain on the Board as a Business Director after serving as President for the past two years.

“The past 12 months has been very busy for ADF with lots of change and big issues to tackle. Rick’s stoic leadership with Trade Minister Don Farrell around the free trade agreement with the European Union helped Australian dairy double down on its long-held position on the deal.

Mr Bennett welcomed the new directors to the ADF Board, Queensland dairy farmer and past President of eastAUSmilk, Matt Trace, who was elected at the ADF AGM, and Independent Director David Beca, who was appointed to fill the casual vacancy.

“Matt Trace is well versed in the regulatory and economic challenges facing dairy farmers, and is passionate about reform in the industry,” said Mr Bennett.

“David Beca is no stranger to the dairy industry, having an extensive dairy consulting business focusing on profitability in Australia and New Zealand. David is exposed to the full plethora of dairy farming systems, from pasture only to total mixed ration.”

Mr Bennett thanked Independent Director Andreas Clark and Business Director Brian Tessman, who left the Board at the AGM, for their service, and Heath Cook for serving as acting President and Chair of the Board since the AGM.

The ADF Board now comprises:

• Rick Gladigau, South Australia (Business Director)
• Ben Bennett, Victoria (Chair, Business Director)
• Matthew Trace, Queensland (Business Director)
• Heath Cook, New South Wales (Business Director)
• David Beca, Victoria (Independent Director)

AUSTRALIAN Dairy Farmers (ADF) has expressed its frustration and concern with the competition watchdog’s decision this morning to allow Coles to purchase two dairy manufacturing facilities. 

The ACCC has announced that the deal was unlikely to decrease competition and that the mandatory Dairy Code of Conduct and the voluntary Food and Grocery Code of Conduct provided safeguards for farmers and processors. 

ADF President Rick Gladigau said: “We consider the ACCC’s decision not to oppose the Coles acquisition of Saputo dairy plants will be a key turning point that the industry and ACCC will look back upon and regret.” 

ADF is concerned with the long-term ramifications. “We hope that in 10 years’ time we are not saying ‘we told you so’, like we have said about the impact of $1 litre milk that Coles started in 2011. 

“We cannot see how this deal will result in anything but increasing Coles’ already substantial market power, reducing market competition and market transparency, and increasing risk to farmers. 

“We are especially disappointed in the missed opportunity to impose additional safeguards or undertakings on Coles. 

“The ACCC has said that safeguards are already in place as Coles purchases of raw milk from farmers were covered by the mandatory Dairy Code of Conduct – yet we know processors have been lobbying the ACCC and government to have the Code reviewed and watered down. 

“The ACCC further stated that Coles’ interactions with processors are also covered by the voluntary Food and Grocery Code of Conduct – yet we know the ACCC themselves recommended in the Perishable Agricultural Goods Inquiry that the voluntary Food and Grocery Code should be made mandatory for retailers and wholesalers.    

Mr Gladigau said: “Given the ACCC’s decision on Coles-Saputo and their reasoning on safeguards, we are calling on the Federal Government to now take steps to make the Food and Grocery Code enforceable as per the ACCC’s own inquiry recommendations.” 

Early price signals were also concerning: “It is not lost on us that Coles has dropped the retail price for milk at the same time as the ACCC’s announcement, and we wonder what this means for future pricing of milk to dairy farmers. 

The ACCC inquiry into bargaining power imbalances in perishable agricultural goods in Australia in 2020 identified information failures and poor transparency in the supply chain. ADF believes the acquisition will supply Coles with a vertically integrated supply chain from farmer to processor, to retailer, to consumer – further increasing bargaining power imbalances and reducing market transparency and competition.  

“The deal does not improve transparency, bargaining power imbalances, information sharing, or competition – not for farmers, processors, other milk brands, or consumers,” concluded Mr Gladigau 

AUSTRALIAN Dairy Farmers (ADF) and dairy farmers are calling on the Australian Competition and Consumer Commission (ACCC) to oppose the proposed takeover of two Saputo processing sites by Coles.

The ACCC is set to hand down its ruling next week (Thursday, 14th September) and ADF does not want to see the proposed deal disadvantage dairy farmers or reduce competition in the dairy supply chain.

An ACCC inquiry into bargaining power imbalances in perishable agricultural goods in Australia in 2020 identified information failures and poor transparency in the supply chain. ADF believes that if the ACCC approves the acquisition Coles will have a vertically integrated supply chain from farmer to processor, to retailer, to consumer.

“The deal will not improve transparency, bargaining power imbalances, information sharing, or competition – not for farmers, processors, other milk brands, or consumers,” says ADF President Rick Gladigau.

“If the ACCC does approve the Coles acquisition of Saputo sites, ADF calls on the ACCC to ensure that Coles and Saputo provide enforceable undertakings to protect dairy farmers,” Mr Gladigau says.

“Further, as per the ACCC’s own recommendations from its Perishable Agricultural Goods Inquiry, the voluntary Food and Grocery Code should be made mandatory for retailers and wholesalers.

“When one of the big two retailers is endeavouring to become more powerful in the supply chain, and processors are calling to review and water-down the Dairy Code of Conduct, it is timely for the ACCC and Government to ensure we protect farmers and promote competition – not imbed further systematic power imbalances, lack of transparency, and barriers to competition in the Australian dairy value chain.”

AUSTRALIAN Dairy Farmers (ADF) questions federal Environment Minister Tanya Plibersek’s move to include water buybacks in a new deal to execute the Murray Darling Basin plan.

1. Why are buybacks being prioritised when they hurt communities, workers, jobs, and food production?
2. Why is the Government not negotiating in good faith with the states and industry?
3. Why is the whole state of Victoria not included in the new agreement when it is a major party to the plan?
4. Why did Government call for project submissions to deliver more water only to then ignore them?
5. Why is the Government not embracing innovation and science to provide more positive environmental outcomes and preserve jobs and economies driven by productive agriculture?

ADF President Rick Gladigau says these unanswered questions create fear and uncertainty for Basin communities, erode a decade of bi-partisanship support and increase risks for food security and food prices.

For the record, ADF supports:

• the intent of the Murray Darling Basin Plan to improve environmental outcomes while maintaining food production
• the extension of time to deliver the Basin plan announced in the new agreement
• the use of the socio-economic test in assessing the impacts of water buybacks.

However, ADF is against:

• any watering down of or removal of the socio-economic test for water buybacks
• deals that ignore the impacts on communities, workers, business, and food production.

“Since the millennium drought 2100GL of water has been transferred from farming to the environment. Dairy farmers have done the heavy lifting. This has improved the environmental health of the Basin,” says Mr Gladigau.

“Dairy farmers are among Australia’s first environmentalists. Landcare is proof of their commitment. They have made significant investments to improve water use efficiency and to build drought resilience into their farming systems.

“At a time when food prices are rising and the Government itself is holding an inquiry into food security it is ironic that buybacks are being prioritised. Buybacks create insecurity and make food production unsustainable.”

Earlier today, Australian Competition and Consumer Commission announced it had “identified preliminary competition concerns” and published a Statement of Issues in relation to Coles’ proposed acquisition of two Saputo milk processing sites in Victoria and NSW.

Australian Dairy Farmers (ADF) president Rick Gladigau says ADF is reassured by the ACCC’s announcement that it will progress the review of the proposed acquisition with a formal Statement of Issues.

Mr Gladigau says this decision suggests the ACCC recognises there are potential competition concerns that warrant further investigation.

“Dairy farmers need strong competition for their milk at the farmgate. ADF does not wish to see a sale that disadvantages dairy farmers in the long-term,” Mr Gladigau says.

“ADF looks forward to engaging with the ACCC further to ensure an outcome is achieved that benefits – or at least does not disadvantage – dairy farmers and the market, more generally.”

Comments attributable to Rick Gladigau, Australian Dairy Farmers president:

AUSTRALIA’S dairy farmers are celebrating World Milk Day today. They are also enjoying the benefits of a mandatory code of conduct hard-won by their national advocacy body, Australian Dairy Farmers.

Today, phones are running hot in the Australian dairy industry as processors announce their prices for farmgate milk for the coming season. This has not always been the case.

The fact that dairy farmers will, by 2pm today, know what price their processor is offering for the coming season is a direct benefit of the work of Australian Dairy Farmers to make milk prices more transparent.

In the not-too-distant past, dairy farmers could be many weeks into the supply season, having their milk collected by a processor for an undisclosed price.

Thanks to the Mandatory Dairy Code of Conduct, dairy farmers now have a month to consider processor’s offers, get milk price income estimations and sign an agreement.

Importantly, the Code is about more than just price. It imposes minimum standards of conduct on processors and dairy farmers, who must deal in good faith.

As farmers watch their input costs increase and the industry navigates a shrinking milk pool, the farmer-processor relationship will be more important than ever before. Farmgate prices and cooperation around the Code are two key ways we can continue to restore trust.

AUSTRALIAN Dairy Farmers (ADF) has welcomed the focus on protecting agriculture and a return to surplus in the 2023 Federal Budget.

ADF president Rick Gladigau said the budget addressed many of the key priorities for dairy farmers’ national policy and advocacy organisation, however ADF believed there were some areas of concern for dairy farmers.

Mr Gladigau said the extra funding for biosecurity announced in the budget delivered in part on ADF’s submissions to the Senate’s recent biosecurity inquiry. However, he said it was unclear how the biosecurity protection levy would be calculated and how the revenue raised would be collected and allocated.

“We appreciate that biosecurity is a shared responsibility, and all risk creators and beneficiaries need to pay their fair share. Based on this premise it is difficult to understand why farmers and importers of low-value cargo are the only people bearing new costs and levies,” Mr Gladigau said. “Surely, the importers of high-value cargo must also bear some of these costs.

“It is appropriate that the Government funds biosecurity because the economy benefits from strong biosecurity. However, biosecurity funding is fairer when everyone who creates a risk also contributes funding.

“We do know that the biosecurity funding builds on the good work Australia has already done protecting the agricultural sector from the threats of foot-and-mouth disease and lumpy skin disease overseas.”

Mr Gladigau said initiatives to improve access to foreign workers and address the workforce shortage were welcomed, together with improvements to how the Department of Home Affairs processed visas.

“Other long-overdue initiatives that have been addressed include a review of the Australian Carbon Credit Unit scheme, the development of a climate adaptation plan and a commitment to fund the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) to improve data collection.”

However, ADF notes there are some shortcomings in other areas for dairy farming.

“There is uncertainty around how renewed funding for the Commonwealth Government’s animal welfare strategy will be used, and the Government continues to withdraw investment from water supply projects,” Mr Gladigau said. “These two issues will broadly restrict confidence in the dairy industry.

“Meanwhile, the rise in the heavy vehicle tax will certainly be an impost on dairy farmers as freight costs will increase for milk, hay, grain and everyday needs, and these are likely to be passed on to farmers.”

ADF looks forward to engaging with the Government on developing the detail surrounding these budget commitments.

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Media contact:  Mark Paterson, Currie, mark@curriecommunications.com.au +61 (0) 409 411 110.

About Australian Dairy Farmers
Australian Dairy Farmers (ADF) is the recognised national policy and advocacy organisation working to improve profitability and sustainability of dairy farming in Australia. Representing Australia’s six dairying states, Australian Dairy Farmers state membership comprises representatives from Victoria, Tasmania, New South Wales, Queensland, South Australia and Western Australia. These state bodies are known as State Dairy Farmer Organisations (SDFOs). ADF provides the SDFOs with support and representation on a national level.

Australian Dairy Farmers (ADF) notes the Coles’ plans to acquire Saputo milk processing plants at Laverton in Melbourne and Erskine Park in NSW with keen interest and caution.

The proposed investment by Coles can be seen as a vote of confidence in the future of dairy, however it can also be viewed as a move by a major retailer to secure milk when supply is declining.

While Coles has offered competitive prices at the farmgate since it started sourcing milk direct from farmers in 2019, it also introduced cheap $1 per litre milk to the retail sector in 2011. ADF considers increased competition and price transparency by both retailers and processors is key to a competitive market.

The real issue is the market power and control that will result with Coles being a processor in their own right and the ability for Coles to set the retail price of their competitor brands in all Coles Supermarkets, it means total control of every fresh milk price within the Coles sphere of influence

ADF is concerned that greater concentration of market power could impede competition or price transparency along the supply chain from farm gate all the way to the retail customer. ADF does not wish to see this disadvantage farmers in the long-term. The dairy industry needs strong competition.

If the sale proceeds, ADF wants Coles to guarantee that all existing Saputo farmers supplying milk to the processing plants will be offered milk supply agreements with either Coles or another party over the long-term. It does not want to see contracts restricted to Coles’ suppliers.

ADF notes that the proposed purchase is subject to clearance by the Australian Competition and Consumer Commission (ACCC) and it will seek input into the ACCC’s review of the deal.

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Media contact:

Mark Paterson

Currie

Tel: 0409 411 110

Email: mark@curriecommunications.com.au

About Australian Dairy Farmers

Australian Dairy Farmers is the recognised national policy and advocacy organisation working to improve profitability and sustainability of dairy farming in Australia. Representing Australia’s six dairying states, Australian Dairy Farmers state membership comprises representatives from Victoria, Tasmania, New South Wales, Queensland, South Australia and Western Australia. These state bodies are known as State Dairy Farmer Organisation (SDFO). Australian Dairy Farmers provides the SDFOs with support and representation on a national level.