Competition laws are about to change. Australian Dairy Farmers (ADF) has lobbied hard for these changes and worked with many different organisations to represent the needs of farmers.
Since January 2011, Coles and Woolworths have continued to cause unnecessary worry for farmers by devaluing products in the supply chain.
Milk was the first weapon of choice in their discount war as it was a household staple and something that consumers were emotionally attached to.
However, milk is not the only dairy product that has been devalued in the price war. Other Australian staples such as cheese, yogurt and butter have also seen a significant price drop that further provokes an already besieged industry.
After almost six years of unsustainable pricing, consumption of dairy in Australia has dropped.
Data collected by Dairy Australia clearly shows that cheap dairy has failed to deliver on the major supermarkets claim that lower prices will increase consumption.
Their marketing strategy has resulted in millions of dollars being taken out of the value chain, which has impacted severely on many dairy farmers.
The battle for the hearts and dollars of Australian consumers has distressed the dairy industry, threatened small shopkeepers and prompted a Senate inquiry.
In mid-March, the federal Senate launched an investigation into dairy pricing and whether Australia’s supermarket giants engaged in anti-competitive practices.
ADF was at the forefront on advocacy and policy demanding change in an industry that caused unnecessary financial pain and worry for farmers through the devaluing of dairy as a product.
The senate inquiry resulted in the Australian Government issuing a draft amendment to the Competition and Consumer Act 2010 outlining a number of changes ADF has been pushing for.
Most significantly, the draft Bill enables the introduction of an ‘Effects Test’ into Australian competition law. The effects test is a logical tool in the Australian Competition and Consumer Commission’s (ACCC) kit bag that most other developed countries in the world have.
-David Basham, ADF