ACCC inquiry into bargaining power gives hope to dairy farmers

THE new mandatory Dairy Code of Conduct could be expanded to include retailers as part of a new Australian Competition and Consumer Commission (ACCC) inquiry into perishable agricultural goods, in a move supported by farmers.

Agriculture Minister David Littleproud today announced he would ask the competition watchdog to examine the effectiveness of the new Dairy Code of Conduct and consider options to extend the Code across the entire domestic dairy supply chain.

Australian Dairy Farmers (ADF) President Terry Richardson said that including supermarkets as part of the Dairy Code of Conduct would help address the discounted retail pricing that has dogged the dairy industry for years.

“ADF has a longstanding policy that a mandatory code of conduct for dairy needs to cover the whole supply chain, from farms right through to supermarkets,” Mr Richardson said.

“For years, dairy has suffered from heavily discounted fixed pricing, while the prices on most other perishable products change according to supply and demand.

“It is time for the Federal Government to intervene in establishing an agreed set of retail pricing standards for dairy products on the retail shelves.”

ADF has previously argued that the fixed pricing of dairy products should be scrapped and replaced with a system based around demand and supply, with a universally agreed percentage pass through margin for farmers to remain sustainable.

The farmer group last year wrote in its submission to the Senate Inquiry into the Performance of Australia’s dairy industry and the profitability of Australian dairy farmers since deregulation in 2000 that the Food and Grocery Code, which already covers supermarkets, could provide this mechanism.

Mr Richardson said this inquiry gave hope that issues around supermarket pricing of dairy products might finally be resolved.

“We’re not asking for much – just that farmers receive a fair price for their product that is more than the cost of production, and that retail pricing is based around supply and demand, not fixed for an extended period of time,” he said.

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

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