Tips for dairy farmers keen to negotiate a better deal.
Tips for dairy farmers keen to negotiate a better deal. Brett Wortman

'Cheap brand milk not full cream'

ADAM Darley’s thoughts on the supermarket milk pricing war are typical of many local dairy farmers who are watching the price of their product being savagely cut by the big retailers for commercial reasons.

“It’s worrying to see this happening,” the young Dorrigo Plateau farmer said.

“When you look at the situation globally, Australian supermarkets are making more profit than in any other country.

“So while milk and bread might be cheap, the supermarkets aren’t going to want to lose any money. We are certainly worried about the impact this might eventually have on us.”

Norco board chairman Greg McNamara was more blunt.

“This pricing war is an absolute disgrace,” Mr McNamara said.

“And there is no doubt it will find its way into the farm-gate price.”

He said while Coles had said they would bankroll this pricing war themselves and not ask farmers to reduce their prices, it was inevitable it would feed through to the farmers.

“As soon as supermarkets’ profits start to fall, the pressure will be on,” he said.

“Already we are seeing the branded products staying on the shelves.”

Of particular concern to Mr McNamara is that consumers are not getting what they think they are getting.

“The milk being sold cheaply is not full cream milk – it contains a percentage of permeate, which is what remains after the protein and fat have been skimmed off.

“Australian labelling laws mean there is no information for consumers to be able to differentiate.”

He said Norco was being proactive in the fight.

“Our milk is only full-cream and there is no added permeate,” he said.

“We have contacted the Australian Competition and Consumer Commission and we are also talking to the retailers – Aldi and Franklins are in there as well.

“We are very aware of the psychological impact this has on the farmers.

“Here they are putting so much time and energy into producing a good quality product and there it is being sold for less than the price of water!”

He said the discounting was really undervaluing the farmers and in the long term it would be the supermarkets which would suffer because farmers would be forced to walk away from the industry.

“The big retailers are vying for a greater market share without caring how it impacts on producers. We hope to be able to overturn this situation in the future – we are trying to reassure our farmers.”

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