Dairy Code could extend to supermarkets

By Jamie Salter

The mandatory dairy code of conduct could soon be extended to supermarkets, with the possible change a focus of a new Australia Competition and Consumer Commission inquiry.

Farmers and processors will be able to give confidential evidence to the ACCC, which is tasked with discovering potential market imbalance.

While some bodies have welcomed the move, dairy farmer Stephen Brown from Gunbower in northern Victoria said it was hard to be enthusiastic about the inquiry, saying it was unlikely to lead to change.

“They always deregulate the dairy industry and then they always find out it was regulated for a reason and we go around in this endless circle,” Mr Brown said.

“It’s not easy to come up with answers either but biggest one is to stop letting all these dairy products in from overseas.

“The supermarkets are just going to bring in product that makes the biggest profit, so were never going to get a good price as long as that keeps going.”

Australian Dairy Farmers president Terry Richardson said including supermarkets in the dairy code of conduct would help address discounted retail pricing that had impacted the industry for years.

“ADF has a longstanding policy that a mandatory code of conduct for dairy needs to cover the whole supply chain, from farms right through to supermarkets,” Mr Richardson said.

“For years, dairy has suffered from heavily discounted fixed pricing, while the prices on most other perishable products change according to supply and demand.

“It is time for the Federal Government to intervene in establishing an agreed set of retail pricing standards for dairy products on the retail shelves.”

Queensland Dairyfarmers’ Organisation president Brian Tessmann said supermarkets have dairy farmers "over a barrel".

“You can’t hold on to it and wait to get a better price, and you can’t dump it [because of EPA laws]. So, whether the product is sitting in your paddock or in packed up in a processing plant, the power is not with you. It’s with the retailers responsible for getting your product into the hands of the consumer.”

While the inquiry is aimed at exploring ways to make the industry more equitable, Federal Agriculture Minister David Littleproud said the inquiry is not designed to regulate food prices.

“Instead, it will identify problems and recommend policy options — including a possible all-encompassing Agricultural Code — if appropriate,” Mr Littleproud said.

National Farmers’ Federation chief executive Tony Mahar said the inquiry would benefit the whole food supply chain, from farmers to consumers.

“Inquiries into the red meat, dairy and chicken meat sectors have revealed that too often, farmers — as the first link in the supply chain — face real challenges in their ability to negotiate,” Mr Maher said.

Mr Littleproud said the existing grocery code, which Coles, Woolworths and Aldi were part of, was voluntary and only dished out small fines.

“It doesn't protect small family farms — they don't have the financial means if they have been wronged to test that in a court of law,” he said.

The ACCC started its inquiry on Monday, August 21, and will report to the government by Monday, November 30.