National Foods in Tasmania paying diary farmers less than the cost of production is only the latest example of abuse of market power that should trigger a review of the ACCC's performance and powers, the Australian Greens said today.
Australian Greens Deputy Leader, Senator Christine Milne, is hosting Kem Perkins, the chair of the Tasmania dairy suppliers' collective bargaining group, and Richard Bovill from the Fair Dinkum Food campaign, in Canberra to make the call. Two parallel Senate Inquiries are about to start into the Tasmanian dairy issue and National Foods is already lobbying hard.
"Not only Tasmanian dairy farmers, but a great many Australian producers and consumers, are being let down by the ACCC's failure to properly prevent abuse of market power," Senator Milne said.
"The ACCC is the body that approves mergers, but is also charged with reviewing the impact of those mergers. There is a strong argument that that is a conflict of interest and the two powers should be separated.
"Since the ACCC gave National Foods effective control of the bulk of Tasmania's domestic fresh milk market, the company has forced down the price they pay for milk from 49.7c a litre to 20.8c, well below the 39c average cost of production.
"When consumers are paying $2 or more a litre, and dairy farmers on the mainland are getting 48c, this is a completely unacceptable abuse of market power that is driving Tasmanian dairy farmers into the ground.
"National Foods has a contract to supply all fresh milk to both Coles and Woolworths and controls 70% of the market.
"I'm very pleased to be hosting Kem Perkins, who represents 30% of the Tasmanian dairy farmers, and Richard Bovill of the Fair Dinkum Food campaign here in Canberra to make their case.
"National Foods has explicitly said that they have no obligation to maintain farmers as viable and they don't care if farmers make a loss. Well here's a question for them - if the farmers go bust, where will they get their milk from?
"We certainly hope that the Senate Inquiries that are due to begin soon will be able to pressure National Foods into paying a fair price for milk and keep Tasmania's world famous dairy farmers viable."