O'Brien: Retailers don't impact milk price? 'Strange logic'
WHILE milk processors had responsibility in the cheap milk wars, MP Llew O'Brien has stressed major supermarkets must not be given a get out jail free card.
In an article published this week about Federal Agricultural Minister David Littleprouds' call for a boycott of supermarket-branded milk, QUT associate professor Gary Mortimer said the idea was "misguided”.
Pointing to the findings of the Australian Competition and Consumer Commission's report into cheap milk, Prof Mortimer said calls for a royal commission into cheap milk "would not be money well spent” as the report found no direct correlation between the fixed retail prices and what's paid at the farm gate.
This is a point Mr O'Brien, a vocal supporter of a royal commission into the major retailers' treatment of suppliers, disputes.
"How do you say it doesn't affect farmgate prices when, when ($1 milk) was introduced, Parmalat took 3c (per litre) off straight away to compensate for the contract?” he said.
And this market impact of was also in the report.
"(It) clearly states $1 milk then keeps downward pressure on branded milk,” Mr O'Brien said.
"They're priced lower than they should be to compensate.
"That's like saying the drug trafficker doesn't have a direct impact on drug addicts - it's the supplier that sold it to him that's the real baddie.
"Well hang on, what about the guy who brought three tonnes of it into the country?
"It's strange logic.”
And while Prof Mortimer said processors may be where the problem lies, Mr O'Brien said this was giving an easy excuse for people to avoid looking at the supermarkets' influence.
"Processors hold a level of responsibility, but their behaviour is facilitated by the supermarket,” he said.
"Imagine if it was anything else that had a cap put on for seven years? Imagine if they did $4 beef? The whole industry would go bust.”