Cobb takes Federal Government to task over milk price war

COALITION Agriculture spokesman John Cobb has accused the Federal Government of inaction in addressing the "milk price war" despite promises to deliver changes.

The milk price war started two years ago this Australia Day, when Coles Supermarkets slashed its retail milk price to $1 a litre - a move the Queensland industry said had already led to the loss of 55 dairy farmers.

Last year a Senate inquiry looking into the matter made numerous recommendations to the government to address pricing and other problems between retailers, producers and the processing industry.

Since the inquiry reported in August last year, the government's official response was to accept most of the recommendations in principle, adding it would address the problems.

But in an opinion piece Mr Cobb penned today, he said the Labor Party's inaction had led to further expansions of $1 litre milk - this time into service stations owned by Coles.

"Australia Day marks the second anniversary of the supermarkets' $1-a-litre milk campaign and while supermarkets deserve their share of the blame the saddest part of this campaign is the Labor Government's complicity in the industry's demise," he wrote.

"The supermarkets are marking the anniversary by extending the $1-per-litre milk to their service stations to take market share from the beleaguered corner store and will further erode industry sustainability.

"This is a blatant attempt by the Coles executive to secure their executive bonuses at the expense of industry and, at the same time, finishing off the corner stores."

Mr Cobb wrote that once supermarkets had eliminated competition, prices would rise, leaving farmers with less money to run their own farms and deliver produce, driving primary producers off the land.

But the government, including Agriculture Minister Joe Ludwig, consistently has said the problems were being addressed.

To that end, Australian Competition and Consumer Commission chairman Rod Sims has, in recent months, stepped up the regulator's examination of supermarkets, promising to deliver change.

But Mr Cobb wrote that the major supermarkets had already refused attempts by processors to pass on the costs of processing milk, "knowing the industry is up against the wall".

Topics:  agriculture john cobb milk price war

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