ACCC’s Green Light to Lactalis-Fonterra Deal Sparks Farmer Fury

Australia's dairy farmers are sounding the alarm following the Australian Competition and Consumer Commission (ACCC)'s decision to approve the Lactalis-Fonterra transaction. The Australian Dairy Farmers (ADF), the peak representative body, has expressed "serious concerns" that the move will leave producers vulnerable, particularly in crucial dairy regions such as Victoria and Tasmania. This decision, they contend, could erode processor competition, which is fundamental to maintaining fair farmgate milk prices amid a constricted Australian milk pool.

ADF President Ben Bennett stated that the merger reduces choices and bargaining power for farmers, posing a considerable risk to farmgate prices. These issues are compounded by concerns over past compliance issues by Lactalis, including significant fines for breaches of the Dairy Code. The ADF urges for court-enforceable measures to protect dairy farmers, including guarantees about milk supply freedom and processing site operations.

With the ACCC justifying the merger on the basis of differing product mixes and retail buyer power, the ADF staunchly disagrees, pointing to existing regional market limitations that could see reduced farmer options.

The ADF is calling for stronger Dairy Code of Conduct safeguards to ensure fair competition and secure Australian dairy farmers' interests, emphasizing the need for continual compliance audits and preventing further market dominance by major industry players.