Victoria’s $2.5 billion dairy industry fears the end of its specialist dairy food safety regulator is a step closer, with legislation rumoured to be tabled next week.
The Australian Dairy Industry Council (ADIC) says the Victorian Government’s proposal to merge Dairy Food Safety Victoria (DFSV) with PrimeSafe, functions of local councils and part of Agriculture Victoria into a multi-industry regulator, risks weakening a globally respected, export-critical system.
“Victoria’s dairy industry operates under one of the strongest and most trusted food safety systems in the world,” ADIC Chair Ben Bennett said.
“There are no suggestions of systemic failure, quite the contrary, and no case has been made that the proposed changes will improve food safety outcomes for Victorian dairy.”
Mr Bennett said industry representatives had met with the Minister for Agriculture and engaged extensively with Agriculture Victoria to understand the rationale for reform and to put forward alternative approaches.
“Our position has not wavered,” he said.
“We support improved coordination between regulators, but we do not support dismantling a dedicated dairy regulator in the absence of demonstrated market failure or a clear net public benefit.”
Victoria produces 63 per cent of Australia’s milk and 72 per cent of national dairy exports by volume. More than 2,500 farms and 17,000 jobs rely on a regulatory system designed specifically for the risks of a highly perishable product.
Despite repeated requests, ADIC has not seen any modelling, a detailed cost-benefit analysis or evidence that the proposed merger would deliver improved outcomes or greater efficiency for Victorian dairy.
“Structural change of this scale requires clear evidence of improved outcomes and demonstrated public benefit,” Mr Bennett said.
“To date, that evidence has not been provided.”
Mr Bennett said DFSV had also provided significant value to Australian agriculture, fully cost recovered from industry licence fees without drawing on taxpayer dollars. Its 2024–25 Annual Report, it reported total assets of $7.81 million and total liabilities of $1.72 million – equating to net assets (reserves) of about $6.09 million.
“These reserves safeguard the Victorian dairy sector, they are prudential funds held to manage risk and compliance, not revenue available to offset broader regulatory costs of other sectors,” he said.
ADIC Deputy Chair John Williams said regulatory credibility was paramount in a global marketplace.
“Maintaining specialised oversight is critical to preserving that confidence,” Mr Williams said.
Mr Williams said the proposed merger would also replace DFSV’s specialised board structure with a broader governance model.
“Dairy food safety decisions must be informed by direct expertise in dairy processing, on-farm assurance and export compliance,” Mr Williams said.
He reiterated ADIC supports practical reforms to strengthen regulatory coordination.
“But we cannot dismantle specialist dairy oversight, there is just too much at risk,” he said.
With legislation rumoured to be tabled in Victorian Parliament next week, ADIC is urging parliament to exclude the dairy sector from the proposed changes and retain DFSV as a specialist regulator, while allowing consolidation to proceed for other sectors if deemed appropriate.
Alternatively, the government must provide the evidence needed for informed decision making by:
- Publishing the modelling underpinning the proposed reform
- Undertaking independent economic analysis, and
- Demonstrating a clear net public benefit before proceeding with structural change.