Australia’s competition watchdog will launch a broad investigation into the country’s dairy industry, the country’s deputy prime minister Barnaby Joyce said on Thursday.
The investigation comes after Australia’s largest dairy processor Murray Goulburn and New Zealand’s Fonterra Co-operative Group in April reduced the their farm gate prices, or what they pay farmers for their milk, by nearly 20 percent. This new price is below the break even costs for a number of farmers, leaving many of them financially struggling.
The Australia Competition and Consumer Commission (ACCC) launched an investigation into the timing and notice of the cuts, but Joyce said the ACCC will launch a broader investigation.
“An in-depth and independent inquiry is a thorough and fair way to uncover inefficiencies and inequities that our farmers face – and identify a way forward,” said Joyce, who is also acts as the country’s agriculture minister.
“The ACCC inquiry, to begin in November, will investigate sharing of risk along the supply chain, supply agreements and contracts, competition, bargaining and trading practices in the industry and the effect of world and retail prices on profitability.”
The ACCC is expected to report its findings in the second half of 2017, and in the meantime global milk prices are expected to have rebounded.
Whole milk powder prices last week soared 18.9 percent and are now 42 percent higher than lows hit in February.
Murray Goulburn, rival Bega Cheese Ltd and New Zealand niche processor a2 Milk Company all met market expectations on Wednesday despite a turbulent year marked by falling prices and sluggish demand.
By Colin Packham
Consumer behaviors and preferences are evolving rapidly. With macro shifts in society, inflation and food supply challenges set to profoundly influence how people consume food and beverages, Givaudan is exploring what the world of dairy alternatives will look like in the coming decade.
After nearly three decades with AFI, Andersen is leaving to pursue a different career path “to work on diverse projects and explore opportunities to serve as board member”. Serving as CEO since 2010, Andersen joined AFI in 1994, initially overseeing applications and R&D. Over the years, he has maintained a strong focus on the whey business.
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