New South Wales dairy suppliers angry with Parmalat on raw milk processing for Woolworths

Posted by AFN Staff Writers on 29th August 2011

Milk processor Parmalat Australia has come under fire from Dairy Farmers Milk Co-operative (DFMC) over its approach to securing raw milk to fulfil a new private label contract with Woolworths.

The dairy farmers are not happy. Their co-operative, the DFMC, has warned that the viability of the New South Wales Dairy Industry is “under threat”, based on its belief that Parmalat has secured very little milk from New South Wales suppliers to meet the 110 million litres required on an annual basis to service the contract with Woolworths.

Parmalat, which operates in Australia under the Paul’s, Rev and Breaka labels, is owned by an Italian-owned conglomerate. It won the processing contract to supply Woolworths’ house brand products two months ago. This contract was previously held by Lion (formerly National Foods). The processing contract will come into effect in September.

DFMC Chairman, Ian Zandstra said, “DFMC suppliers are facing a 30% reduction in milk destined for supermarket shelves.

“It is becoming increasingly more likely that New South Wales consumers who purchase their milk from Woolworths supermarkets will be drinking milk produced from Victorian dairymen.

According to the DFMC, its suppliers are likely to experience first-hand the ‘knock them down’ price campaign by Woolworths, with 30% of all current milk being “no longer needed by Lion due to movement of the private label contract from Lion to Parmalat”.

According to DFMC, it has 320 dairy farmer members in New South Wales who produce over 360 million litres of milk annually. Nationally, DFMC represents 780 dairy farmer members producing one billion litres of milk per annum.