April 14, 2011
 

Australian farmers request for a milk code of conduct

 

 

Anger over the price war that has begun in Australian supermarkets has caused dairy lobby groups to request for a milk code of conduct.

 

The Queensland Dairyfarmers Organisation (QDO) said the price war has seen major retailers selling milk at AUD1/litre (US$1.05) and it is affecting farm gate returns.

 

QDO chief executive Adrian Peake said contractual relationships between the different groups in the supply chain must be fair.

 

"We need an actual code of conduct that goes through the whole supply chain, and that is why we are asking for a commissioner to be able to oversight it," he said.

 

"We need a commission with a head of power that can actually direct mediation or even arbitrate."

 

The dairy farmers' calls have won support from the federal opposition.

 

Shadow Agriculture Minister John Cobb said a future coalition government would consider introducing a milk code of conduct and appointing a milk commissioner.

 

However, he said he is more concerned that the Australian Competition and Consumer Commission examines the milk price war.

 

"All those options including a milk code of conduct, an ombudsman or a referee to look at what is fair, because that is what the ACCC is ignoring."

 

However, the Federal Agriculture Minister is reserving his judgment until after the Senate Economics Committee hands down its final report into the impact of supermarket price decisions on the dairy industry.

 

Senator Joe Ludwig said lower milk prices should not be at the expense of Australian dairy farmers.

 

He added that Coles and Woolworths have both confirmed in evidence that current price reductions are being funded from cuts to their retail margins.

 

The ACCC has also declined to comment and said it will also wait till the report has been tabled on April 20.