Government to launch inquiry into milk prices

Posted by Josette Dunn on 14th February 2011

The Australian senate has announced an inquiry into the ongoing price war between the country’s major supermarket chains.The price war, which began around Australia Day (26 January), when Coles dropped the price of milk to A$1 (US$1) a litre. Woolworths Ltd, Aldi and Franklins have quickly followed Coles’ lead.

milk.jpg

The senate inquiry will consider whether the behaviour of the leading supermarkets’ anti-competitive and whether the price reductions will have a negative impact on dairy farmers.

However, agriculture minister Joe Ludwig said he has been given an assurance from Coles that the price reduction will not affect farm-gate prices.

“I’ve got assurances that I’ve received from Coles, specifically from the merchandising director, who have said, ‘Coles is not reducing the price it pays to its milk processors either’, so this move will not impact them or the dairy farmers who supply them,” he said.

Industry body, Australian Dairy Farmers, has launched a campaign to urge shareholders of Wesfarmers, which owns Coles, to call for an extraordinary general meeting of the company to explain the price cuts.

Additionally, the body has called for the Australian Competition and Consumer Commission (ACCC) to carry out its own investigation.

just-food is the world’s leading portal for the global pre-packaged food and retail industries. Its daily mix of breaking news, views, analysis and research serves over 100,000 food executives each month. http://www.just-food.com/