Save Australia’s Dairy Industry
Statement by Senator Hanson on the Australian Dairy Industry
18th September 2018
I won’t be buying cheap milk after learning about the devastation that $1-a-litre milk has caused dairy farmers and the threat it poses to the supply of fresh milk for our children and grandchildren. Australian consumers take for granted that they will always be able to buy fresh milk at a reasonable price, but that situation won’t last unless we take action now. Industry experts say that if the dairy farmer continues to be paid less for fresh milk than the breakeven price at the farm gate then production will fall further and more milk will be exported to places like China, where they are prepared to pay up to $9 a litre. The Chinese consumer loves Australian fresh milk. It is the reason Chinese interests bought Australia’s largest milk producer in 2016—a group of 25 dairy farms in Tasmania. This Tasmanian dairy herd of over 20,000 cows produces enough milk to fill two Qantas flights a week bound for the Chinese market.
If we don’t take action now, fresh milk will become a luxury item and we will be forced to use milk powder. When that happens I will hold Coles and Woolworths responsible for the disappearance of fresh milk from our refrigerators. Coles and Woolworths use their market power to buy fresh milk for their home brands below the cost of production. They can do this by simply threatening not to stock other products like cheese, butter and yogurt. I know most Australians are willing to pay bit more now for their milk to ensure the continued supply of fresh milk and to support our dairy farmers. I call on the government to regulate the price of fresh milk on supermarket shelves in a way that sees dairy farmers paid a fair price for their fresh milk. This regulation would end the milk war started by Coles in 2011 and encourage competition in supermarkets.
To be clear: I’m not calling on the return of the regulatory regime which existed prior to 2000, where the federal government subsidised the price of manufactured dairy products and the state subsidised the price of fresh milk. I want the farmgate price for milk regulated so that milk will be available at a fair and sustainable price for consumers and the dairy industry. I have called on the government to refer the duopoly of Coles and Woolworths to the ACCC for anticompetitive behaviour, but the government won’t do it.
Dairy farmers have left the industry and many more are under huge financial strain and trying to work out how they can survive. The toll on the mental health of these Australians is too high, and everyone in the industry knows of someone who has suicided. Dairy farmers cannot be expected to deal with huge electricity prices, a drought and the misuse of market power by Coles and Woolworths. They need a bit of help, and I’m asking consumers and the government to do their bit. I know the ACCC has made recommendations and I support them, but it is not enough. Dairy farmers are running out of feed and don’t have the money to buy more.
I am worried for Queensland dairy farmers and for Queenslanders, because we once produced enough milk for our state and export and now we don’t. We had 1,500 dairy farms in 2000 and now we are down to 385. Dairy farmers need a sign that it is worth struggling on, and the quickest and most effective way now is for consumers to stop buying home brand milk from Coles and Woolworths. I’ll keep fighting for dairy farmers in my discussions with government. I want the price of fresh milk at the farm gate regulated, and I want to make sure that not one single dairy herd goes to the slaughter houses for lack of feed. Please support branded milk from the independent processors like Maleny Dairies, 4Real Milk and Cooloola Milk that pay dairy farmers a fair price for their fresh milk. I’m calling on the Australian people to stand by these dairy farmers and not pay the cheap price from Coles and Woolworths.
