ACCC dairy inquiry on track: Keogh

06 Apr, 2017 09:39 AM
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Mick Keogh said producers had raised concerns about contracts, requirements imposed on them by processors and transparency of pricing.
The ACCC was trying to understand margins in the supply chain.
Mick Keogh said producers had raised concerns about contracts, requirements imposed on them by processors and transparency of pricing.

The Australian Competition and Consumer Commission (ACCC) was about to turn its attention to the milk processor sector and supermarkets, according to dairy inquiry head Mick Keogh.

The ACCC’s Agriculture Commissioner, Mr Keogh said all seven consultation sessions with dairyfarmers had now been completed.

“At the same time, we issued requests for information from all the major processors and the three major retailers involved in the market,” Mr Keogh said.

“Those documents are now furnished to the ACCC and there are a couple of teams, looking through those.

“To be fair, we have heard very much the dairyfarmers' perspectives on the market - the next stage of the inquiry will be focused on the dairy processors' and the retailers’ perspectives

“I think, we recognise it is important to understand all aspects of the market, not just one perspective, so that will be a quite important part of the study.”

The ACCC was trying to understand margins in the supply chain and market share of different dairy products.

In June and July, the ACCC would conduct ‘in camera’ interviews with senior executives of the processing industry and supermarkets.

“Hopefully, it seems there will be a draft by the end of August, there will be another period of discussion with industry and then the report has to be handed to the government by the end of October."

Mr Keogh said producers had raised concerns about contracts, requirements imposed on them by processors and transparency of pricing.

“In other words, does the weighted average price the processor promotes mean much, from an individual farmer’s perspective?," he said.

“What does it mean - what do farmers actually receive, as opposed to what is advertised?”

He said each dairying region in Australia had specific issues, in Western Australia it was oversupply and how contracts were renewed, while in northern Australia, farmers were concerned about milk swaps and the implications of seasonal supplies from the south.

“In southern Australia, it’s the role of the export and domestic market, and what influence that has on price," he said.

“Each region is different but there are some common issues right across.”

Mr Keogh said the report would be handed to Treasurer Scott Morrison in October.

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