The Australian Competition and Consumer Commission (ACCC) has found dairy processors are blaming the low price of milk paid to dairy farmers on their private label milk contracts with supermarkets.
ACCC boss Rod Sims tells John Stanley that isn’t the case and if processors wanted to pay farmers more, the cost would be worn by the supermarkets.
“It’s a straight pass through,” he says.
“They just cannot say that the $1 milk private label contracts are prohibiting them from paying the farmers more.”
Mr Sims says processors should not be claiming their hands are tied.
“We’re going out now to make it clear… to the farmers that the price that they get paid on the $1 milk private label contracts is a flow through.
“And, secondly, we’re putting the processors on notice. If we now catch you saying this sort of thing, you could land yourself in court with very large penalties.”
Click PLAY below for the full interview
A dairy farmer from south-east Queensland, Erol, has called in to tell John they’re seeing something different at the “coal face”.
“What Rod has not dealt with, is the pressure that the supermarkets put on the processors when they do these contracts.”
He says legally the processors may be allowed to pay farmers more for their product, but the pressure from the top end of town is preventing them from doing so.
He says, at the moment, farmers aren’t even close to breaking even.
Click PLAY below to hear from dairy farmer Erol