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Dairy farmers angered at ACCC findings on cheap supermarket milk

Dairy farmers are angry about the Australian Competition and Consumer Commission's (ACCC) decision not to take any action on dollar-a-litre milk.

ACCC agricultural commissioner Mick Keogh, in his final report on the issue, said there was no evidence that supermarkets were trying to manipulate the farm gate price by selling cheap milk.

"We understand that farmers are incensed because it devalues the work they do and the value of their product, but aside from that we think it is a bit of a distraction in terms of what's happening in the industry more generally," Mr Keogh said.

Matthew Trace, vice president of the Queensland Dairyfarmer's Organisation said cheap milk puts "intolerable" pressure on farmers.  "Dollar-a-litre milk has had a devastating effect on our industry [and] it is clearly the problem," he said.

David Williams from the Hunter Dairy Development Group, said the ACCC should have focussed on the supermarkets. "They drive the prices down unreasonably and the processors have no choice but to accept the terms and conditions the supermarkets impose on them."

Terry Richardson, president of Australian Dairy Farmers said the industry was losing millions as a result of cheap milk.  "Selling milk as a loss leader at the rear of the supermarket, at price points cheaper than water, is not in the long-term interest of this industry," Mr Richardson said.  "Once the money departs the supply chain, it is never returned."

Mr Keogh said he wanted action on a mandatory code of conduct in the dairy industry, despite processors preferring to develop a voluntary code.  He said it would reduce the power imbalance between farmers and processors and help to "change the culture of behaviour".

The ACCC has sent its report to the Federal Government for a response. 

 (From ABC Rural - 3 May 2018)