Standoff continues between Tasmanian dairy farmers and National Foods

Posted by Daniel Palmer on 30th November 2009

Most of the suppliers of milk to National Foods in Tasmania are yet to sign agreements with the dairy firm, despite the deadline for the offer ending this afternoon.

The collective bargaining group maintains that the current offer by National Foods is unfair and will see farmers unable to meet the costs of their production. However, National Foods insists that the current offer will not be raised as the market is not strong enough to support a price rise.

The dairy firm wrote to their Tasmanian suppliers on Friday to reaffirm its milk price offer and to reject a new claim from the collective bargaining group that would cost in excess of $16 million more than the current offer from 1 January 2010. The company said their deal was the best in the state and urged their suppliers to sign before the November 30 deadline passed.

“National Foods does not have the capacity to pass (the proposed) increase on to our customers, which would place our business at a distinct competitive disadvantage in the marketplace,” the letter by Murray Jeffrey, General Manager Milk Procurement and Inbound Logistics, read. “We owe it to our 500 workers in the state, and our farmers, to maintain a sustainable business into the future.”

“The world commodity price is showing some signs of improvement with grain and fertiliser prices well down on the previous year so we remain hopeful we can navigate through this tough time together.”

The National Foods offer would amount to 36.8 cents per litre, but most farmers are reportedly holding out for 40 cents, according to the bargaining group.

“It’s high time we sat down and talked and tried to get some sense into this whole thing before its just explodes in everybody’s faces,” farmer’s spokesman Phil Beattie told the ABC . “Very, very few of us have actually signed because we believe that what they’re offering us is very unfair considering that they’re prepared to pay 44 cents a litre in New South Wales.”

He believes only five of the 85 suppliers have signed so far.

National Foods will continue to collect the milk of suppliers that do not sign, but at a lower price.