QFF welcomed the reappointment of Mick Keogh as Deputy Chair of the ACCC last week and acknowledges the positive impact he has had as an advocate for farmers and small businesses over a long period of time.
The work of the ACCC, in particular its agriculture unit, is very important in promoting a transparent and fair market environment for farmers to ensure they are treated fairly under Australian competition law. The ACCC has a critical role to play in monitoring and enforcing appropriate competition in our agricultural markets which subsequently underpins a sustainable future for our food and fibre production systems.
As a prime example, the ACCC is currently undertaking a review of the proposed acquisition of two Saputo processing plants in NSW and Victoria by Coles. Last week, QFF made a submission to the ACCC outlining concerns that competition will be significantly reduced should Coles in effect become a processor and that the ACCC must not allow this purchase.
Like many dairy industry stakeholders, including farmers, processors and dairy peak body eastAUSmilk, QFF believes if the Coles acquisition is approved, competition across the market will be significantly eroded.
If allowed, this acquisition would effectively see Coles owning the dairy equivalent of ‘paddock to plate’ and would see this retail giant further expand its colossal market power across the entire dairy supply chain. Due to Coles’ already large buying power, this acquisition could lead to the demise of processors, processor brands and dairy farmers.
The negative impact this acquisition could have on competition for farmers and processors cannot be understated. It would give Coles the ability to seriously impact and potentially destroy the market for processors, processor brands and farmers by providing Coles the opportunity to take full control of the dairy supply chain.
If the acquisition were to proceed, for the first time a processor would set the wholesale and retail price of their products, and perhaps more alarmingly, a processor would then for the first time also be setting the wholesale and retail price of all their competitors.
QFF calls on the ACCC to scrutinise this proposed acquisition with extreme care taking into consideration concerned submissions made from across industry. Dairy farmers in Queensland and northern NSW were already caught off guard last week when Lactalis announced a 5c/L drop in the farmgate milk price. Let’s not add to the challenges already facing dairy farmers and the industry.
These recent developments are a timely reminder for us all to not take our farmers or food and fibre production systems for granted. As consumers, we can all take responsibility and have a positive impact each and every week simply by being a little bit more discerning in our purchasing choices.