Dairy farmer group raises concerns over Coles-Saputo factory deal

Farmers want the competition watchdog to examine how a move by Coles to purchase Saputo’s processing sites will impact prices across the sector.

Competition concerns over a deal by Saputo to sell its milk bottling plants have been ratcheted up by farm lobby leaders.

Supermarket giant Coles confirmed earlier this month it would become a milk processor for the first time, buying Saputo’s Melbourne and Sydney plants for $105 million.

EastAusMilk co-chief executive Eric Danzi is the latest to raise concerns over the deal, which is set to wrap up next year.

“(The Saputo deal) will give Coles complete control of the supply chain and give them further power against other brands,” Mr Danzi said.

“Surely this will not be allowed? It is up to the ACCC to decide whether it will be allowed based on whether it will reduce competition.

“Blind Freddy can see that this move will reduce competition.

“We can never forget the fiasco of $1 a litre milk and the damage it caused to the entire dairy supply chain and in particular farmers.”

Coles is set to purchase Saputo’s Melbourne and Sydney processing sites. Picture: NCA NewsWire/Naomi Jellicoe

Last week, Australian Dairy Farmers president Rick Gladigau called on the Australian Competition and Consumer Commission to closely examine the Saputo-Coles deal to ensure it maintained competition at the dairy farmgate.

Mr Danzi echoed that sentiment.

“Rather than allow retailers to increase their market power and dictate more to its suppliers, the ACCC and the Federal Government should find ways to reduce their market power,” Mr Danzi said.

A Coles spokeswoman declined to comment on Mr Danzi’s competition concerns.

Earlier this month, Coles chief executive Steven Cain said the deal would improve supply chain resilience in the dairy sector.