darren.chester.mp@aph.gov.au 1300 131 785
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February 9, 2011

Federal Member for Gippsland Darren Chester has expressed concerns for local dairy farmers after the major supermarkets cut the price of milk to $2 a litre.

Mr Chester said the 30 per cent cut has outraged the dairy industry and he has joined his Nationals colleague and Shadow Minister for Agriculture John Cobb in calling on the Australian Competition and Consumer Commission (ACCC) to investigate the major supermarkets and milk wholesalers to ensure they do not have too much market power and are not anti-competitive in their behaviour.

“Shoppers need to recognise that short-term gains in terms of milk prices may result in long-term losses in terms of the number of viable dairy farmers in Australia,” Mr Chester said.

“Food security for our nation is one of the most important issues we face and I’m concerned that this price war is all about luring shoppers into purchasing ‘home brand’ milk which will force other processors out of business.

“Once the supermarkets have a monopoly on the market, they will be in a position to dictate prices and our local farmers will suffer, along with consumers.

“The price cuts are unsustainable and the ACCC must investigate the actions of the supermarkets in light of the concerns that have been raised by the dairy industry.”

Mr Cobb has slammed comments by supermarket giant Coles, who dismissed dairy industry concerns relating to reduced milk prices as ‘hysteria’.

“Our dairy farmers deserve better from the major supermarkets, especially Coles,” Mr Cobb said.

“To dismiss industry concern as ‘hysteria’ is extreme arrogance and a complete insult to the people literally trying to stay afloat.

“Dairy farmers will wear the costs of Coles’ latest marketing gimmick.”

Mr Chester said the dairy industry in Victoria was primarily export-focused and remained strong, but the price cuts posed a risk to the long-term viability of family dairy farms.

“It is unrealistic to expect dairy farmers to provide consumers with clean Australian milk under the current conditions and still earn a reasonable income,” Mr Chester said.

“If we want to continue to have high quality milk Australian-grown milk available then the dairy industry is going to need the support of the major supermarkets.”

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