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Milk price war: small business and farmers the losers

As Coles takes on Aldi and Woolworths with its dramatic drop in milk prices, the National Farmers Federation has called for urgent talks with the big businesses engaged in the milk price war. When Coles dropped its milk price to just $1 per litre, the other supermarket chains, Woolworths, Aldi and Franklins, all  joined the fray. The severe impact on farmers and others along the supply chain has triggered a Parliamentary enquiry.

As farmers and distributors struggle to survive, Queensland Liberal MP Mr Scott Buchholz has come out in favour of protection. He says small businesses such as farmers and other in the food production chain need support to prevent big business from destroying their livelihoods – which is not in the long term interest of the consumer.

“We operate in a free market and it’s the right of any company to turn a profit … but not at the hands of smaller business,” Mr Buchholz said.

Federal politicians, independent senator Nick Xenophon, seconded by independent MP Rob Oakeshott, have presented Prime Minister Julia Gillard with a letter requiring urgent intervention.

The letter, dated 8 February, says: “We are incredulous that the government does not see this as significantly damaging to the dairy industry in Australia… It is a ‘price war’ we do not need and should not have and it is not in the long term interests of consumers.”

Woolworths admits the milk war is damaging.

Spokesperson, Simon Berger, says “This is not a price war we would have started and it’s a price war that we do have some concerns about… we do prefer to work with farmers rather than against them.”

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Elayn James

Elayn James

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