The competition watchdog has launched a 12 month inquiry into the dairy industry following massive cuts to the farm gate milk price announced by dairy processors Murray Goulburn and Fonterra Australia in May which pushed dairy farmers to the brink.
The inquiry was ordered by Treasurer Scott Morrison after milk prices became a political issue.
The Australian Competition and Consumer Commission has released the terms of reference and an issues paper for the investigation.
The inquiry will focus on competition between milk processors, contracting practices, the availability of price and other market information, the effect of private label products, including pricing, on the industry, options for supply into global markets and dairy farm profits.
“The ACCC is seeking feedback from interested parties on issues across all product and geographical markets in the Australian dairy industry. This inquiry will closely examine the key competition and fair trading issues affecting the dairy industry,” ACCC Chairman Rod Sims said.
“As a formal inquiry, the ACCC will also have the ability to compel information from parties including processors and retailers. Our aim is to present a really clear picture of the issues facing the market today, and make any recommendations to ensure it remains fair and competitive.”
The ACCC will hold public forums in dairy-producing regions so it can speak to dairy farmers about their concerns.
It will hand its final report to Mr Morrison by 1 November 2017.
The inquiry is on top of to two separate ACCC investigations into whether Murray Goulburn and Fonterra’s clawback was misleading, deceptive or unconscionable.
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