Australian Dairy Farmers (ADF) worries that it would give Coles too much clout and would undermine regulations that requires processors to post milk prices.
The supermarket giant wants to purchase Saputo’s Laverton, Victoria, and Erskine Park, New South Wales, facilities.
The bulk of the processing done at these two facilities is to supply Coles’ home brand milk products.
ADF does not want to see a deal that disadvantages farmers.
Dairy farmers need strong competition for their milk, it said in a submission to the competition watchdog.
ADF remembers that Coles’ introduced $1-a-litre pricing that impacted dairy farmers for eight years.
We note there was further criticism of Coles’ behaviour when it finally increased prices and promised to pass on the 10 cent per litre “drought levy” to farmers.
Coles committed to pay around $5.25 million to processor Norco to resolve the concerns after the competition watchdog got involved.
