ACCC fails to fix flawed reasoning

ACCC dry on milk


QDO has met with processors and ACCC to push for a fairer go for dairy farmers.


Last week Queensland Dairyfarmers’ Organisation (QDO) travelled to Sydney and Melbourne to address important issues regarding the ACCC’s flawed interpretation of functions in the domestic milk market.

QDO executive officer Eric Danzi and I, along with other state dairy farm leaders, attended a meeting in Melbourne between Australian Dairy Farmers (ADF) and Australian Dairy Products Federation (ADPF) – the peak body for our nation’s milk processors. The milk processing industry opposed any proposal for a mandatory code of conduct between farmers and processors. The farmers in attendance said processors needed to be more committed to the existing voluntary code to ensure it is more binding, transparent and inclusive, if it has any chance of being a viable alternative. 

Most farmers have heard processors claim the reason they cannot pay farmers more is because of the reduced revenue per unit at the retail end of the value chain (e.g. $1 litre milk and $6 cheese). But they (processors) had made no such submission to the ACCC and QDO wanted to know why they had left the farm sector to carry the load on this issue. Their only excuse was a disappointing claim of commercial and contractual limitations. 

While in Sydney, QDO met with Mick Keogh and other ACCC staff to  explain our disagreements with the ACCC interim report. We expressed our disappointment in ACCC’s lack of reasoning on the issue of retailers selling products below cost over the majority of Australia as being predatory conduct between different milk brands. The ACCC had only considered this when comparing retail store against store, but admitted it was predatory to use it at a brand level also. Strangely however, the ACCC reasoned it had not caused damage because milk was still on the shelf. This strange reasoning ignores the massive decrease in state and national milk production reflected in decreases in dairy exports since $1 per litre milk began.

These issues further highlight the need for politicians to step up and take action to ensure the domestic milk market functions properly and gives farmers the fair go they deserve.

The story ACCC fails to fix flawed reasoning first appeared on North Queensland Register.


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