One of the dairy industry’s major long-held wishes was realised last week, at least in part, with an announcement from Australia’s competition watchdog.
Increased scrutiny of supermarket conduct will be in the Australian Competition and Consumer Commission’s (ACCC) crosshairs next financial year.
That welcome announcement was included in the organisation’s compliance and enforcement priorities for the coming financial year, announced at a business event in Sydney.
It’s an outcome Australian Dairy Farmers (ADF) has long advocated for.
The focus comes at a crucial time as dairy farmers grapple with increasing costs of production and declining farmgate milk prices, while supermarket profit margins remain strong.
With Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecasting a $740 million decline in milk production value, driven mainly by lower farmgate milk prices, the need for equitable treatment across the supply chain has never been more urgent.
The ACCC’s 2025–26 priorities include addressing anti-competitive behaviour and misleading pricing in the supermarket sector. This directly aligns with ADF’s call in the mandatory Food and Grocery Code of Conduct consultation.
ADF’s submission to the Treasury’s Grocery Code Review highlighted the inherent power imbalance between supermarkets and suppliers.
We successfully argued that a mandatory code would provide greater price transparency, enforce accountability on retailers, and protect farmers from unfair trading practices.
The ACCC’s commitment to now addressing supermarket market power confirms that our advocacy is delivering real outcomes for Australian dairy farmers.
ADF has long called for regulatory intervention to prevent major supermarkets from wielding excessive influence over pricing and supply arrangements. Our submission highlighted several key recommendations, including:
- Making the Grocery Code mandatory to ensure compliance from retailers;
- Preventing supermarkets from using milk as a ‘loss leader’ to unfairly attract consumers while squeezing supplier margins; and
- Ensuring that retail pricing strategies do not result in further reductions in the price of raw milk paid to farmers, which risks accelerating the decline of Australia’s dairy industry.
The ACCC’s newly stated priorities validate ADF’s position.
The regulator has committed to investigating misleading supermarket pricing practices.
With Coles and Woolworths controlling around 65 per cent of Australia’s grocery market, their dominant position has long created uncertainty for dairy farmers trying to plan their businesses in a volatile environment.
The farmgate milk price has declined while production costs remain high, putting immense pressure on producers.
The ABARES report confirms that lower milk production values are primarily a result of falling farmgate milk prices, underscoring the urgent need for supermarket accountability and fair distribution of profits across the supply chain.
ADF will continue to work with the ACCC, Treasury, and government to ensure regulatory reforms benefit dairy farmers and secure a more sustainable future for the industry.
We remain committed to ensuring supermarkets engage in fair pricing practices that do not disadvantage dairy farmers.
We do this while also advocating for stronger enforcement mechanisms that hold retailers accountable for market manipulation, allowing dairy farmers to get on with delivering nutritious products to Australian consumers.
The ACCC’s shift in focus is a testament to the strength of strong, targeted advocacy.
However, this is just the beginning.
We urge policymakers to move swiftly in implementing good policy, done well. This will ensure all players in the dairy supply chain receive a fair share of returns.
For dairy farmers, fair competition is not just a policy goal – it’s a necessity.
By Paul Mumford, Trade & Economics Policy Advisory Group Chair, Australian Dairy Farmers