November 26, 2018
 

Australian politician calls for royal commission into supermarkets accused of profiteering
 

Australia's dairy farmers have slammed major supermarkets for profiteering during the country's drought, with the former Deputy Prime Minister of Australia calling for a royal commission into these companies.

According to the Northern Daily Leader, the cost of milk has not risen above $1 per liter, and low dairy prices had prompted New England MP Barnaby Joyce to demand for the matter to be looked into.

Joyce claimed that supermarkets Woolworths and Coles kept prices down as "they're doing it so consumers walk all the way to the back of the shop to get their carton of milk and on the way back, they pick up other items." This practice, he said, had led to farmers "paying for the advertisement for the retailer."

Australian dairy farmers had faced significant challenges in recent years- notably, that of that of having their incomes impacted in 2016 by late season retrospective changes to farmgate prices paid by the country's two biggest dairy processors.

The changes sparked an inquiry into the dairy sector conducted by the Australian Competition and Consumer Commission (ACCC).

While supermarket chains used their bargaining power with processors to deliver savings to the consumer, the ACCC's report placed the onus on processors to pay a higher wholesale price to farmers. This expectation is underscored by the little change in farmers' income even when milk prices are raised in supermarkets.

Meanwhile, Joyce warned of the threat the Australian dairy industry faces if no action is taken to reverse the situation.

"It's very hard to get a person who's never grown up on a dairy farm to walk in off the street with millions of dollars in capital to set the farm up, train and have the veterinary skills to run a dairy herd, plus get up at half-past-four and go to bed at 9pm every day of the year," he said, pointing to the challenges of dairy farming.

"Because the cows don't take holidays, it's a 365-day per year job – are you prepared to do that? Of course many people aren't."

- Northern Daily Leader