Re­tail­ers need to be put un­der spot­light

Dairy News Australia - - NEWS - STEPHEN COOKE

THE RE­CENT Se­nate re­port into the dairy in­dus­try failed to ad­e­quately ad­dress the role of re­tail­ers in pro­mot­ing dis­counted dairy prod­ucts, ac­cord­ing to the United Dairy­farm­ers of Vic­to­ria. The Se­nate re­port, orig­i­nally due in Fe­bru­ary, was granted five ex­ten­sions be­fore it was fi­nally re­leased last month. UDV Pres­i­dent Adam Jenk­ins said most of the Com­mit­tee’s rec­om­men­da­tions “reaf­firm a lot of the work the dairy in­dus­try is al­ready un­der­tak­ing to im­prove trans­parency along the sup­ply chain.” “How­ever, we do note that the con­sid­er­able time that was spent talk­ing about re­tail pric­ing dur­ing the in­quiry doesn’t seem to be prop­erly rep­re­sented among the rec­om­men­da­tions.” The Se­nate Stand­ing Com­mit­tee on Eco­nomics handed down 12 rec­om­men­da­tions, but it is up to the Gov­ern­ment to im­ple­ment them.

Rec­om­men­da­tions in­cluded:

Dairy pro­ces­sors set con­ser­va­tive open­ing prices to avoid retrospective price step­downs Gov­ern­ment to ease red tape on ex­ist­ing co-op­er­a­tives, and to sup­port new co-ops Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion (ACCC) to eval­u­ate ef­fec­tive­ness of vol­un­tary code of con­duct An­other re­port, tar­get­ing com­pet­i­tive­ness and trans­parency in the Aus­tralian dairy in­dus­try, is cur­rently be­ing con­ducted by the ACCC and due to be handed down in Novem­ber. Mr Jenk­ins said farm­ers hoped the ACCC would ad­dress con­cerns along the en­tire sup­ply chain that were ab­sent from the Se­nate Com­mit­tee’s re­port. The Chair of the Se­nate com­mit­tee be­hind the re­port, La­bor Sen­a­tor Chris Ket­ter, de­scribed the Gov­ern­ment’s de­ci­sion to im­ple­ment the ACCC re­view as a “knee jerk re­ac­tion to the Se­nate in­quiry” when he ad­dressed the Queens­land Dairy­farm­ers’ Or­gan­i­sa­tion con­fer­ence last month. How­ever, he said the ACCC in­ves­ti­ga­tion would be worth­while. Sen­a­tor Ket­ter said he was look­ing for­ward to the ACCC com­ing to grips with the “power im­bal­ance” be­tween dairy farm­ers and pro­ces­sors, and said the ACCC needed to make it easier for farm­ers to col­lec­tively bar­gain, to up­skill co-op­er­a­tive groups, and to re­duce costs in­volved in ar­bi­tra­tion. He said be­cause of his union back­ground: “I un­der­stand what mon­grels Coles and Wool­worths can be.” He sug­gested the in­dus­try should drive a pub­lic ed­u­ca­tion cam­paign to as­sist con­sumers in buy­ing branded milk. “It makes me sick to see Coles and Wool­worths pre­tend to be best friends of the farm­ers with what they’re do­ing when in re­al­ity not much of that is go­ing back to the in­dus­try as a whole.” He said pro­ces­sors and re­tail­ers were “work­ing hand in hand” against the in­ter­est of farm­ers. “Re­tail­ers have the power of set­ting $1/litre milk but you have pro­ces­sors will­ingly go­ing along with that. This wasn’t defini­tively shown in the in­quiry but we had lots of sub­mis­sions that sug­gested that pro­ces­sors, in or­der to get other prod­ucts on shelves in re­tail­ers, were pre­pared to go along with the dol­lar milk in or­der to get other prod­ucts on the shelves. “There’s a lot of work to be done and ACCC is the right body to look at all those fac­tors. I have con­fi­dence they have right ex­per­tise and in­tegrity to look at it. We’re look­ing for­ward to the ACCC com­ing to grips with this and then the Gov­ern­ment com­ing on board.”

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