February 11, 2011

Australia to inspect milk price war

The Australian parliament will check over a milk price war following concerns that the major supermarkets are trying to drive out competition.

Coles and Woolworths are engaged in a milk price war that has driven down the price of the daily necessity to AUD1 (US$1) a litre.

Coalition MPs on Thursday (Feb 10) called for the competition watchdog to step in and save dairy farmers who face bankruptcy.

Independent senator Nick Xenophon heard their concerns and hours later announced an upper house inquiry. "I understand that consumers want cheap milk. But if cheap milk in the short term means the destruction of our dairy industry in the long term, ultimately consumers will suffer," Senator Xenophon said.

Opposition agriculture spokesman John Cobb warned action needed to be taken immediately. He said executives at Coles were "quite happy to get their bonuses over the dead bodies of farmers".

Senator Xenophon says the inquiry is likely to start in the second week of March.

Australian Greens Deputy Leader Christine Milne said the inquiry was a positive thing, but she warned it was not without risks.

The Senate needed to run a fulsome inquiry or risk the integrity of parliament.

"The time for talk is over. It's time Australia's dairy farmers saw something being done to protect their livelihoods," Senator Milne said.