Adjournment Speech: Dairy Industry

I said in my maiden speech that when it comes to agriculture, big business needs to play fair and farmers deserve to receive a fair price for their product. I also said I was concerned about the devastating impact the ongoing Coles and Woolworths milk price war is having on the dairy industry.

When $1 milk started in 2011, Coles and Woolworths forced down the price with their processes. Parmalat then forced a price cut of 3c a litre on dairy farmers and Lion cut their price by 3c a litre courtesy of their contract with Coles. Queensland Dairyfarmers’ Organisation estimates that since $1 milk started the number of dairy farms in Queensland has plummeted from 566 to 380. Milk production has fallen by 3.1 per cent between 2012 and 2017, and now around 160 megalitres of milk is imported into Queensland just to meet demand. Dollar milk forced down the price to farmers in 2011 and it has kept it down ever since. In real terms, farmers have copped a fall in price year on year, irrespective of the true market value of their milk. I don’t see how $1 in 2011 can be worth the same in 2018. A litre of discounted $1 milk from 2011 should, based on inflation, now be selling for around $1.16 at least. Bottled water is more expensive than the humble litre of nutritious milk.

The purpose of business is to make a profit, and if they don’t they soon vanish. Coles and Woolies are out there to make a profit for their shareholders. Likewise, farming is a business and farmers are there to put food not only on our tables but also on their own tables. They can only put food on their tables if they make a profit. In Wide Bay, many of my dairy farmers are not. They are vanishing. Dollar milk is not only having a devastating impact on the viability of dairy farms; it’s also impacting on the farmers’ wellbeing and, very sadly, on their mental health. It must end. I’ve met with Woolworths to hear their side of the story and I’m yet to meet with Coles. Woolworths points to international factors, the processors, inquiries, the ACCC and court action, but they’ve failed to convince me that dairy farm gate pricing is beyond their influence.

When will the $1 milk price war end? There must come a time when $1 milk is no longer a loss leader for Coles and Woolworths but becomes straight-out market manipulation. When will the ACCC use the powers that it has to intervene on the effect $1 milk pricing is having on the dairy milk industry? As legislators we cannot stand by and allow our dairy farmers to be used as slaves to Coles and Woolworths. Coles and Woolworths say they don’t set the farm gate price; the processors do. Their $1 milk effectively puts a cap on the price retailers pay processors and processors pay farmers, and this also puts a ceiling on the price processors sell their branded milk for. If Coles and Woolworths paid the processors a fair price for milk, the processors could pay a fair price to the farmers. Coles and Woolworths would continue to be profitable and be able to supply householders with affordable groceries if they ensured farmers receive a fair price for their products.

But $1 milk, sold at the same price as it was in 2011, is not sustainable. Every day the price war continues, it fires another shot into the heart of Queensland dairying. So long as Coles and Woolworths continue with their unethical $1 milk, milk processors will dance to their tune while the dairy farmers get screwed. If Woolworths charge 15c for a plastic bag, then surely they need to charge more than $1 for a litre of milk. I will do everything it takes with the tools that I have at my disposal to get a fair deal for our farmers. At the moment dairy farming in Wide Bay is at the top of the list. My local dairy farmers are feeling like Third World forced labour at the hands of the practices of Coles and Woolworths. Simply put, $1 milk is unfair. It takes large amounts of money out of the dairy supply chain. Local dairying businesses are the ones who are paying the price, and it must stop.
ENDS