Dairy farmers comment on price war tactics revelation

Consumers deserve to know about the tactics Coles deployed when it decided to slash its own-brand milk to $1 per litre, the Queensland Dairyfarmers’ Organisation (QDO) has said.

According to reports in The Guardian and revealed by SBS TV, Coles said it had to deploy “every PR tactic possible to neutralise the noise” around the $1/L milk pricing.

QDO President Brian Tessmann said he was not shocked by Coles’ admission but saw it as confirmation that the company had its own interests at heart and was ignoring the impact of the price wars on dairy farmers.

“As Coles profits have trebled in recent years to over $1.5 billion, the Coles-led discounting of fresh milk has seen major domestic fresh milk processors’ profitability pushed down; and with that, farm gate prices to dairy farmers have also been pushed down to where the majority can’t make ends meet.

“For Coles to describe dairy farmers raising concerns about the impacts to them and their families and the dairy industry as ‘noise’ is a massive and unconscionable insult. That ‘noise’ is the sound of generations of dairy farming experience being forced off the land due to Coles’ marketing tactics,” Tessmann said.

“Here’s an idea for Coles: instead of mounting massive PR and advertising campaigns worth millions of dollars and talking about ‘noise’, Coles could price its milk sustainably and work positively toward seeing farmers receive a fair and sustainable price for their milk at farm gate.”

The Queensland dairy industry has lost more than 86 farmers since the price wars began, Tessmann says, and has lost 86 million litres of fresh milk production each year and more than $258 million in investment. Tessmann estimated that 258 jobs at the farm level have been lost, with more people losing their jobs along the value chain.

This reinforces the need for a mandatory code of conduct and an ombudsman, Tessmann said, as well as changes to the Competition and Consumer Act to help protect farmers.

“We had positive support from Agriculture Minister Barnaby Joyce during the election campaign, and QDO and our federal industry partner ADF [Australian Dairy Farmers] will be working with the new federal government as a matter of priority to see them create action in this important policy area,” Tessmann said.