As a result of a number of management issues in Australia's major co-operative, the Australian Consumer and Competition Commission (ACCC) has been asked to investigate the situation.
I have collated a number of issues, mainly structural that I believe affect the industry in Australia.
These include :
- Why is Australia ranked 194th out of 197 countries in changes in milk growth since the year 2000? This statement comes from comparing production figures on the FAO's Statistical database. http://www.fao.org/faostat/en/#data/QL
- Why does Australia have a 4 pillar bank policy to support competition in the banking sector, but no similar policy for the food supply sector?
In "The Conversation," there is the following quote.
" The inference is that in a much more concentrated banking system the benefits from the larger scale may not be passed on to consumers”
- I have included illustrations extracted from the Western Australian Dairy Industry Authorities Annual reports which detailed costings along the supply chain. There have been significant changes since deregulation with possibly more margin in the distribution sector than before, although there are reduced margins in the low-cost milk sectors which are used as advertising and draw cards for other purchases.
- Where is the market power along the supply chain - This is not easy to determine and the work is ongoing. Intuitively it is where the largest companies are.
The largest supermarket has a turnover of $38,000,000,000 The largest processor in Australia has a turnover of $2,500,000,000 The largest farm in WA has a turnover of $8,000,000
I hope you find the report useful and possibly stimulating.