Dairy industry needs another inquiry as Australia Day marks two years of milk wars: Xenophon

Independent senator Nick Xenophon has called on Federal Parliament to consider reopening an inquiry into the dairy industry, following two years of similar investigations and protests over the supermarkets’ price wars damage on farmers.

This comes after a few weeks of heavy discounting within the grocery market and follows Coles’ decision to discount another 100 products, including milk, sold at Coles Express outlets. Various industry groups have protested the decision, including dairy farmers.

Xenophon, speaking to SmartCompany this morning, said while he isn’t necessarily calling for an inquiry to start straight away, it’s an option the Senate should consider.

“There have been various inquiries undertaken in the dairy industry, a number of recommendations have been made, and the government has ignored them.”

“There is always the option of the Senate revisiting that.”

Last week the Australian Dairy Farmers called for supermarkets to start easing pressure on farmers, saying two years of discounts had wreaked havoc on the industry.

Australian Dairy Farmers head Neil Campbell has told SmartCompany the industry has been “significantly impacted” by the discounts in some areas of the country.

The dairy industry has been one of several sectors affected by the discount wars; it’s also one of the largest and has been most vocal about its treatment. Two years ago the industry called for meetings with supermarket giant Wesfarmers over discounting.

Subsequent inquiries suggested the government explore new pricing transparency laws, among other recommendations, but Xenophon says nothing has been done.

“It’s self-evident where the government has ignored recommendations, and given the increasing number of dairy farmers walking off the land, these are relevant inquiries.”

“There is mounting evidence there is structural change in the dairy industry, where we have more dairy farmers walking off the land.”

Xenophon says he wants to avoid a situation where most of the country’s milk comes from alternative sources. There is a “real risk” sources of fresh milk could shrink, he says.

“This issue won’t go away. Dairy farmers are hitting the wall, while Coles and Woolworths have both raised their market share.”

Xenophon says previous inquiries recommended measures such as an ombudsman or mediator for the industry, and says this is an option the government should still consider.