Why the milk in our supermarkets is not as Aussie as you think
Do you know where the milk on your supermarket is really from? These are the shock findings from a quick scan across the dairy aisle — but dairy farmer leaders say they aren’t too fussed.
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How Australian is the bottle of milk in your fridge?
A quick scan across supermarket shelves shows few milk brands are processed by Australian-owned firms.
Canadian dairy giant Saputo processes Coles’ house brand milk at its Laverton North and Erskine Park plants, while Kiwi-owned Fonterra supplies Woolworths.
Even iconic brands such as Big M, Pura and Dairy Farmers are about to be sold to China’s Mengniu Dairy Company, leaving just the a2 Milk Company and a few niche brands in Australian hands.
Many of the international dairy processors starting to dominate both the domestic market and Australian exports are registered overseas, with financials and board decisions hidden from view.
Saputo is owned by a family-owned firm, while Australian farmers are also likely to have little leverage with companies such as Lion Dairy & Drinks: Mengniu Dairy Company, which is about to buy the business, is also a majority owner of Burra Foods.
But as Australian milk brands move offshore, the nation’s dairy farmer leaders say it’s competition for milk that matters more than who owns the factories processing it or the brands.
That’s the message from Queensland Dairy Organisation president Brian Tessmann, as China’s Mengniu Dairy Company finalises its bid to buy out Japanese firm Kirin’s stake in Lion Dairy & Drinks.
“I’d prefer they were Australian-owned, but what matters is competition between processors and how they behave,” Mr Tessmann said.
Asked whether dairy farmers had less leverage with foreign-owned companies, South Australian Dairyfarmers Association president John Hunt replied: “That’s where the mandatory dairy code comes into play.
“The real difference now is that every farmer can do an individual contract, which is a lot for many of us to get our heads around with the end of co-ops,” Mr Hunt said.
With milk in short supply and processors desperate to maintain throughput, Mr Hunt estimated farmers were getting an extra 40c a kilogram above the international commodity price as a result of competition.
But while United Dairyfarmers of Victoria president Paul Mumford agreed competition was strong, he feared what would happen once excess stainless steel was rationalised and milk production rose.
“We won’t see the full effects until we see the balance come back between milk production and manufacturing capacity,” Mr Mumford said.
“When we see that balance return we are going to be extremely vulnerable, as farmers, to processors.”
He warned that once this happened dairy farmers would have far less power when dealing with international processors, with few locally owned firms left on the ground.
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