Queensland farmers slam Govt inaction on milk war

The farmers are unhappy with the Gillard Government's response to the Senate Economics References Committee's 2011 final report of the supermarket milk price war and competition and pricing in the Australian dairy industry. They have also taken a swipe at Treasurer Wayne Swan, a Queenslander.

Queensland Dairy Farmers Organisation president Brian Tessmann says after two years of Senate inquiries and clear evidence of mounting impacts on dairy farmers, the Federal Government is yet again avoiding the disaster, ducking for cover and taking no action.

"The Gillard Government and more disappointingly Wayne Swan, as a parliamentary representative of Queensland, have turned their back on Queensland dairy farming families being impacted directly by the milk price war," says Tessmann.

"They have shown complete disregard for the sustainability of the dairy industry that supplies Australian consumers with fresh milk and dairy products every day.

"The Government has been repeatedly presented with clear and incontestable evidence that Coles' marketing tactic is adversely affecting dairy farming families and action needs to be taken now.

"They've also been presented with clear evidence that in the long run there will also be a negative impact on consumers, via the experience of shoppers in the United Kingdom."

He says the Federal Government has failed to commit to the Senate Inquiry recommendation of a review into the impacts on the Western Australia, New South Wales and Queensland dairy industries and has chosen to pass the buck and hide behind the ACCC, which has time and again proven itself to be ineffective and powerless against the tactics of the major supermarkets.

"For the Government to rely on the ACCC defies logic when we all know it does not have the necessary power to counter the tactics of these major retailers."

The price war was triggered by Coles Supermarket, which slashed the price of its home brand milk to $A1/L. Other supermarkets matched the price. The price war has led to downward pressure on the farmgate price.

Tessmann says the Coles lead milk price war has already impacted many Queensland dairy farming families and has contributed to the loss of some 30 dairy farmers from the industry in Queensland since January 2011.

"The next wave of impacts from the milk price war is now hitting farmers with some half of Queensland dairy farmers having their milk prices and incomes cut on average by some $A30,000 to $A40,000. This follows the other half of Queensland dairy farmers having their incomes slashed by 15-20% the previous year.

"These mounting impacts will put many dairy farmers into the red and will see more farmers leave our industry when we can't afford to lose any. Already I know another five farmers have their herds booked for sale."

Tessmann notes Queensland's milk production this year has fallen short and it needs to produce another 100 million L to meet the needs of the population of Queensland over the next decade.

During the Senate Inquiry the ACCC admitted it had "not done any monitoring of the other items" in reference to the 15,000 other items in a supermarket, that Coles may be increasing prices to offset the price cuts on staples such as milk and that they had not checked if Coles was selling below cost in regional areas.

"Even Coles' major competitor Woolworths stated a year ago that the price cut was unsustainable and would lead to farmers being impacted," says Tessmann.

"We all deserve much better than the current complacency of the Federal Government."