The Australian Competition and Consumer Commission says its dairy industry inquiry will examine competition between milk processors, contracts between processors and farmers, global supply markets, and the profitability of dairy farms.
In its Dairy Inquiry Issues Paper published today, the ACCC has laid out the key issues it will look at as part of its 12-month inquiry which it has been directed to carry out by the Australian Government.
“The ACCC is seeking feedback from interested parties on issues across all product and geographical markets in the Australian dairy industry. This inquiry will closely examine the key competition and fair trading issues affecting the dairy industry,” ACCC Chairman Rod Sims said.
“As a formal inquiry, the ACCC will also have the ability to compel information from parties including processors and retailers. Our aim is to present a really clear picture of the issues facing the market today, and make any recommendations to ensure it remains fair and competitive.”
Key issues to be considered include:
- competition between milk processors
- contracting practices
- the availability of price and other market information
- the effect of private label products, including pricing, on the industry
- options for supply into global markets
- the key factors influencing the profitability of dairy farms.
“The ACCC will hold public forums in a number of dairy producing regions so we can speak with dairy farmers about their concerns, and we will release further information about these forums in the coming months,” ACCC Commissioner Mick Keogh said.
The ACCC must provide its final report to the Treasurer by 1 November 2017.
The Issues Paper, Terms of Reference and further information about the Inquiry is available: Dairy Inquiry.
On 27 October 2016 the Treasurer issued a notice requiring the ACCC to hold an Inquiry into the competitiveness of prices, trading practices and the supply chain in the Australian dairy industry. The Inquiry formally commenced on 1 November 2016.
Separate to the Inquiry, the ACCC investigations relating to the cuts to the price paid to dairy farmers for milk solids, announced by Murray Goulburn and Fonterra Australia in April and May 2016 are continuing.
The ACCC has been provided with additional funding of $11.4 million over four years to establish an Agriculture Unit that will conduct investigations and engagement in rural and regional areas.
The ACCC has established an Agriculture Information Network. Subscribers to this information network will receive emails about developments concerning new or updated resources, enforcement action as well as upcoming events, surveys and other opportunities to engage with the ACCC.