Fed: Consumers the winners from dairy shakeup

AAP General News (Australia)
04-09-2001
Fed: Consumers the winners from dairy shakeup

EDS: Restoring keyword from earlier Milk



By Shane Wright

CANBERRA, April 9 AAP - Dairy deregulation is saving Australia's shoppers at least
$150 million a year but is hurting farmers and corner shops, the consumer watchdog reported.

A new Australian Competition and Consumer Commission (ACCC) analysis of deregulation
found milk prices in the nation's supermarkets were down by around 22 cents a litre in
large, three-litre family packs.

Some supermarkets are offering milk as much as 40 cents a litre cheaper than before deregulation.

The ACCC said official estimates of $120 million in savings to consumers did not take
into account cheaper milk sold through corner shops, convenience stores or takeaway food
outlets.

These would push the total saving to the community to over $150 million, it agreed.

The ACCC believes even cheaper milk is on the way as competition hits smaller milk retailers.

But farmers, even with an 11 cents a litre levy on all milk sales, are worse off because
of deregulation - particularly those in New South Wales, Queensland and Western Australia
where hundreds of farmers have left the land.

A NSW-based dairy farmer who only 12 months ago was making a $20,000 profit on $82,000
worth of milk sales is now making a loss of $30,000 on milk sales of $37,000.

Even the dairy package payment is failing to offset the losses facing farmers in NSW,
Queensland and WA.

The ACCC report also found another dairy deregulation casualty - corner shops and convenience
stores.

Supermarkets increased their share of all milk sales to 52 per cent from 48 per cent,
and of generic milk products to 62 per cent from 37 per cent.

ACCC chairman Allan Fels said even though there was some cost to small business because
of deregulation, it had to be weighed against the benefits to consumers.

He said the commission would monitor the pricing of supermarkets against small businesses,
watching for predatory behaviour.

"There is no question consumers are the big winners. The old price of milk was artificially
inflated," he said.

But executive director of the Queensland Retail Traders and Shopkeepers Association
Ian Baldock said dairy deregulation was contributing to the problems facing the industry.

He said extended trading hours, on top of dairy deregulation, were hurting many small,
family-owned, businesses.

"Consumers are now more likely to duck in to a nearby supermarket than into their local
corner store," he told AAP.

Australian Milk Producers' Association chairman Eric Baker rejected some of the ACCC's
findings, especially its price estimates.

He said the association had warned deregulation would benefit supermarkets at the expense
of farmers.

"There is no reason to keep following this policy when so many farmers are going out,"

he told AAP.

Agriculture Minister Warren Truss said the report reiterated previous estimates that
NSW, Queensland and WA had been hardest hit by deregulation.

He said there were indications the ACCC was prepared to look at collective bargaining
proposals from farmers to help boost their milk prices.

AAP sw/cjh/de

KEYWORD: DAIRY NIGHTLEAD (RESTORING KEYWORD)

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