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Milking it for all it's worth: competition and pricing in the Australian dairy industry

Dairy industry Retail trade Australia
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Milking it for all it's worth 1.66 MB

The retail market for milk in Australia has become more concentrated and, partly as a consequence, so has the wholesale market. This means that farmers, lacking countervailing market power, are at a competitive disadvantage. The result has been that retail prices for milk have increased while farm-gate prices have been subdued, and in some recent cases pushed down to or below the cost of production. Concerns about Tasmanian dairy farmers apparently suffering from abuses of market power led to this inquiry. But while the impetus was the dairy industry, the issues are common to many other sectors of the economy where the retail market is also becoming increasingly dominated by generic products sold by the two main supermarket chains.

This report is divided into the following chapters:

  • Chapter 2 sets the scene by describing the structure of the dairy industry in Australia;
  • the pricing of milk, at the farm-gate, wholesale and retail levels, is described in Chapter 3;
  • competition issues are discussed in Chapter 4;
  • arising from this, improvements are suggested to the negotiation processes between farmers and processors in Chapter 5;
  • and other matters, including food security and strategic plans, are addressed in Chapter 6.
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