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Australia: ACCC finds AUD$1 milk ‘not to blame for low profits’

 |  April 30, 2018

The Australian Competition and Consumer Commission (ACCC) released its final report on Monday, April 30, calling for a mandatory code of conduct to be put in place to improve contracting practices between dairy processors and farmers.

“Dairy farmers are understandably frustrated the retail price of milk has declined in real terms, since retailers adopted their milk pricing policies,” ACCC Commissioner Mick Keogh said in a statement. “The price set by retailers is arbitrary and has no direct relationship to the cost of production for the supply of milk.”

He explained that increasing the price of milk would be unlikely to affect the amount of money the farmer sees coming back at the end, as it still has to go through the same processors, who essentially set their own rules in complex contracts. It means that farmers are unlikely to feel the benefit, unless they “have improved bargaining power in their negotiations with processors.”

Full Content: The Australian

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