Supermarket review recommends huge fines, mandatory code for Woolies and Coles

Australia’s major supermarkets could face fines that run into the billions of dollars if they fail to comply with a revamped and mandatory code of conduct designed to protect farmers and families.

An interim review of the Food and Grocery Code of Conduct, to be released on Monday, has the country’s big four supermarket retailers and wholesalers – Woolworths, Coles, Aldi and Metcash, which supplies IGA – squarely in its sights with a series of recommendations designed to deliver cheaper prices for consumers and fairer prices at the farm gate.

James Massola, The Sydney Morning Herald, 7 April 2024.

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Watchdog will ‘regret’ letting Coles buy milk processing plants, dairy industry representatives say

The ACCC approved the supermarket’s takeover of Saputo’s two dairy processing facilities after a ‘detailed review’ but farmers fear the move will reduce competition in the market.

Dairy industry representatives have said the Australian consumer watchdog will regret its decision to allow Coles to purchase two fresh milk processing facilities, making it the only supermarket in Australia to own and operate a milk processor.

The Australian Competition and Consumer Commission said it approved the takeover by Coles after months of “careful consideration” and “discussions” with farmers and industry bodies, and a “detailed review” of Saputo and Coles’ internal documents.

In April, Coles announced it had bought the Erskine Park factory in New South Wales and the Laverton plant in Victoria from dairy processor Saputo for $105m, subject to regulatory approval from the ACCC.

The president of advocacy body Australian Dairy Farmers (ADF), Rick Gladigau, said he opposed the decision.

“We hope that in 10 years’ time we are not saying ‘we told you so’, like we have said about the impact of $1 litre milk that Coles started in 2011,” Gladigau said.

“We cannot see how this deal will result in anything but increasing Coles’ already substantial market power, reducing market competition and market transparency, and increasing risk to farmers.

“[It] will be a key turning point that the industry and ACCC will look back upon and regret.”

Before the takeover, Coles already acquired about 80% of milk processed at the facilities, buying raw milk from producers and processing it at the plants under an agreement with Saputo.

Farmers raised concerns that the acquisition would result in Saputo leaving the NSW fresh milk market entirely, reducing competition of raw milk buyers.

But the ACCC deputy chair, Mick Keogh, said Saputo’s financial records suggest the company has the “commercial incentive” to continue operations in NSW, and therefore takeover is “unlikely” to significantly lessen competition in the market.

Aston Brown, The Guardian, 4 December 2023.

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Australian Dairy Farmers urge ACCC to block Coles/Saputo deal

In Short: The nation’s dairy farmer lobby says the ACCC needs to block Coles from buying two Saputo processing plants.

Australia’s competition watchdog needs to bite back at plans by Coles to acquire Saputo’s milk processing plants, the nation’s dairy farmer leader says.

Australian Dairy Farmers president Rick Gladigau has made an eleventh-hour plea to the Australian Competition and Consumer Commission to oppose the $105 million deal, with a decision set to be handed down next week.

He says the proposed supermarket takeover of the Sydney and Melbourne bottling plants will reduce competition in the dairy supply chain.

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Source: Alex Sinnott, The Weekly Times, 6 Sept 2023.

Coles seeks security ands certainty, in buying two milk processing factories

"Coles' purchase of two milk processing factories has been described as a "strategic acquisition", by one leading food industry analyst.

Melbourne-based Fresh Agenda director Steve Spencer said the purchase of the Victorian and NSW factories, from Canadian dairy giant Saputo Dairy Australia for $105 million, was no surprise.

"Milk production has been dropping for a long time, the owner of the asset probably flagged their interest in moving them on, so it's logical," Mr Spencer said.

"It's a very strategic acquisition for the security of that business - they [Coles] used to have milk plants a long time ago.

"They do it for a reason and the reason is security and certainty - in this industry, at the moment, there isn't a lot of that."

To read the article in full, go to: The Standard

Source: Andrew Miller, 5 April 2023

Saputo sells facilities to Coles

"Saputo has announced it plans to sell two of its fresh milk processing facilities in Laverton North, Victoria, and Erskine Park, NSW, to supermarket Coles, a situation the dairy industry says needs to be watched closely...

Dairy advocacy group eastAUSmilk said the farm gate price paid to dairy farmers must remain fair and transparent, with Coles now owning the equivalent of the dairy “paddock to plate“.

eastAUSmilk co-chief executive officer Shaughn Morgan said the ACCC must ensure there were no negative impacts upon the Australian dairy industry, especially given the declining milk production and farmers exiting the industry over the past years.

"We will closely monitor the ACCC review and the impact that the Coles purchase may have on the dairy industry," he said.

The sale follows Saputo’s announcement late last year that it was selling its Maffra plant."

To read the article in full, go to: The Cowra Free Press

Source: Fiona Lloyd, 4 April 2023