Dairy Connect chief calls for Australian Competition and Consumer Commission to examine farmgate freeze
Dairy Connect chief executive Shaughn Morgan has called for the Australian Competition and Consumer Commission to examine this season’s static farmgate figures.
AUSTRALIA’S competition watchdog should examine static farmgate prices, a key dairy figure says, after seven months of little movement.
The nation’s big three processors — Fonterra, Saputo and Bega — have maintained their respective farmgate figures at $6.40kg/milk solids, with some exceptions, since the July 1 start to the 2020-21 season.
Writing in The Weekly Times today, Dairy Connect chief executive Shaughn Morgan has called for the Australian Competition and Consumer Commission to examine the matter.
His call comes as Norco stepped up its farmgate offering by 2c a litre on Monday, one of the few processors nationwide to do so this season.
“The fact that there have been no step-ups this season is something the ACCC should consider looking into,” Mr Morgan wrote.
“I am not suggesting any breach of the law or indeed the Act, but under Section 45 of the Competition and Consumer Act 2010, all parties must not engage in anti-competitive behaviour.
“Some behaviour need only be a concerted practice which has the purpose (or has or likely to have the effect) of substantially lessening competition, which the Act prohibits.”
The ACCC has been contacted by The Weekly Times for comment.
The mandatory dairy code of conduct came into effect in January 2020 and the first farmgate reporting period took place in June, with processors compelled to list prices a month out from the start of the season.
Both Fonterra and Saputo opened with $6.40/kg milk solids while Bega split its opening figure geographically — $6.40 for southern Victoria and $6.55 for northern Victoria.
All three have maintained those prices, although several other processors with a focus on the domestic market have shifted in recent months.
While Norco made its move this week, Bulla was even earlier to move its farmgate offering upwards.
In December, the Colac processor lifted its farmgate figure by 10c across its three bands — Band 1 suppliers are now paid $6.80/kg milk solids, Band 2 at $6.60 and Band 3 at $6.40. The Bulla step up was paid retrospectively on milk supplied from July 2020.
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