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Qld Dairyfarmers Organisation: ‘We told you so' about Coles milk wars driving farmers off land
MEDIA reports this week, on the public relations blitz that Coles employed to stem negative agribusiness reaction to its Australia Day 2011 launch of $1-a-litre milk, are proof of Coles' self interest and disdain for the dairy industry, according to the Queensland Dairyfarmers Organisation (QDO).
QDO president Brian Tessmann said the reports were more confirmation that Coles supermarkets were taking care of their own interests, blatantly ignoring the negative long-term impacts on Australian farmers - and already driving "generations of dairy farming experience" off the land.
While the move was popular with the public and led to competitors such as Woolworths having to match the milk offers, questions continue to be raised about Coles applying undue pressure in reducing farm incomes to unsustainable levels to fund the campaign.
This is at a time of record profitability for Coles. According to reports in The Guardian and revealed by SBS TV, Coles had to deploy ‘every PR tactic possible to neutralise the noise'.
Milk is well-known in the retail industry as a staple item in Australia that drives regular walk-in shopper traffic - which is why it is always presented at the farthest ends of supermarkets.
The QDO has called Coles' tactics in spending large sums of money on public relations and advertising while denying many farmers a sustainable income for their milk as "unconscionable".
"QDO and our industry partners continue to point out the facts," Mr Tessmann said. "The facts are that the Queensland industry has lost more than 86 farmers since the milk war began and Queensland milk production is drastically down and short of the state's own drinking milk needs.
"We have lost some 86 million litres of fresh milk production per annum and a loss of over $258 million in investment in fresh milk production, along with 258 jobs at a farm level and more people losing their jobs along the value chain."
The strong concern in the agribusiness sector is that losses in local milk production will be recovered through imports.
Mr Tessmann said, "As Coles profits have trebled in recent years to over $1.5 billion, the Coles-led discounting of fresh milk has seen major domestic fresh milk processors' profitability pushed down, and with that farm gate prices to dairy farmers have also been pushed down to where the majority can't make ends meet.
"For Coles to describe dairy farmers raising concerns about the impacts to them and their families and the dairy industry as ‘noise' is a massive and unconscionable insult. That ‘noise' is the sound of generations of dairy farming experience being forced off the land due to Coles' marketing tactics," Mr Tessmann said.
"Here's an idea for Coles. Instead of mounting massive PR and advertising campaigns worth millions of dollars and talking about ‘noise', Coles could price its milk sustainably and work positively toward seeing farmers receive a fair and sustainable price for their milk at farm gate."
Mr Tessmann said it was a credit to small organisation like the QDO and others that Coles felt it necessary to combat the industry with huge PR campaigns, as QDO "continues to unapologetically prosecute the case for farmers to the media, consumers and politicians".
Mr Tessmann said it reinforced the need for a mandatory code of conduct and an ombudsman and changes to the Competition and Consumer Act, to help protect farmers from clear market failure resulting from the supermarket price war.
"We had positive support from Agriculture Minister Barnaby Joyce during the election campaign, and QDO and our federal industry partner ADF will be working with the new Federal Government as a matter of priority to see them create action in this important policy area."
Links to reports by The Guardian and SBS TV are here and here respectively.
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