Australian dairy leader warns of cut-price Kiwi fresh milk imports

Queensland dairy leader Matt Trace has warned the sector to be aware that a flood of NZ fresh milk could soon head across the Tasman.

Fresh milk from New Zealand could appear on Australian supermarket shelves for the first time, a Queensland dairy leader warns.

eastAUSmilk president Matt Trace says the historic gap between farmgate prices paid in New Zealand compared to Australia has opened an opportunity for cost-cutting retailers to ship fresh milk westwards across the Tasman.

He said while there weren’t concrete plans made public by retailers, regulations needed to be tightened to ensure a flood of cheaper milk did not appear in Sydney, Brisbane and Melbourne supermarket refrigerators.

Most NZ farmers are paid between $NZ7.25 to $NZ8.75 ($A6.65 to $A8.00) per kilogram milk solids while Australian farmers earn upwards of $A9.20 per kg in Victoria and upwards of $A12.00 per kg in NSW and Queensland.

“There’s a huge farmgate price gap (between Australia and NZ). So there’s growing concern that fresh milk from New Zealand could be shipped here to undercut local produce,” Mr Trace said. “You only have to look at the increase of NZ butter and cheese. Every year, more and more appears on supermarket shelves.

“With the advances in technology to preserve fresh milk for longer, there’s a growing possibility that supermarkets would start importing Kiwi milk here.

“Many people didn’t think dollar a litre milk was likely until it happened.”

eastAUSmilk president Matt Trace on his Queensland farm in 2013. Picture: Glenn Barnes

Generic milk pricing is relatively standard across Australia’s big three supermarkets at $1.60 a litre, with little variance in pricing between Aldi, Coles and Woolworths.

However, across the Tasman, NZ supermarkets sell generic milk at a range of price points.

Woolworths Australia’s NZ equivalent, Countdown sells its generic milk for as little as $NZ1.87 ($A1.72) a litre while retail competitors such as Four Square, New World and Pak N Save sell generic milk for as much as $NZ2.48 a litre ($A2.28), depending on the quantity.

NSW Farmers dairy committee president Phil Ryan noted there had been attempts in the past to sell Australian fresh milk abroad as a premium product.

WA milk is currently exported to Singapore, where shoppers in the city-state pay upwards of $7 a litre for a fresh litre.

“Fresh milk isn’t an immediate threat to my knowledge but it could become a problem in the medium term,” Mr Ryan said.

“There have been advances in heat treatment of milk to make it last longer but there’s also transport logistics to deal with (for NZ milk) to be viable.”

Fonterra processes more than 80 per cent of New Zealand’s milk supply but the Kiwi dairy giant hosed down the concept of trans-Tasman fresh milk.

A Fonterra Australia spokeswoman said: “We don’t sell branded fresh milk in Australia, so we have no plans to import it from NZ.”

NZ’s second-largest processor — Open Country Dairy — was contacted by The Weekly Times but did not respond in time for deadline.