In Australia at the present time, milk producers are dominated on the one hand by the Woolworths and Coles distribution chains, and on the other by a few largely foreign-owned dairies.
In the light of this situation, the Australian Senate recently urged the Australian Competition & Consumer Commission (ACCC) to publish, for September, a detailed analysis of the costs and incomes of producers, milk processors and distributors. The objective is to strengthen the negotiating power of Australian producers.
To achieve this, the Australian Senate is seeking to change the competition laws; to rebalance the positions of all players in the dairy industry; to make the ACCC more effective by splitting it into two distinct parts responsible for vetting mergers and groupings of companies, and for overseeing markets; and, finally, to stimulate competition. Meanwhile, takeovers and mergers are banned, to prevent the present situation from getting worse.
The problem of sharing added value at the different stages of the dairy sector chain is an issue which is also being raised in France. At the end of May 2010, Nicolas Sarkozy called a meeting of farmers and agri-food businesses to try and reach agreement on reducing hidden margins.
The case of the dairy industry in Australia, a country known for its liberal commercial policies, is illustrative of the need to rebalance relationships throughout the agricultural supply chain, so as to avoid dominant players abusing their positions, thus unbalancing the market and damaging the production potential of farmers.