Milk deregulation benefits Australian consumer

Six months after the deregulation of Australia's dairy industry, milk prices have fallen by as much as 40 cents a litre with the likelihood of further drops, said the Australian Competition and Consumer Commission​ (ACCC) this week. ACCC Chairman, Professor Allan Fels, noted that across all categories of milk stocked in Australian supermarkets, including plain, UHT, modified, flavoured and specialty milk, the average price reduction was 12 cents per litre. But while consumers were the big winners - saving more than $ A120 million ($ US59.46 million) a year - dairy farmers, and small store owners were missing out, Mr.Fels said on Monday. Professor Fels said more Australians were buying their milk from the supermarket where they paid an average of 22 cents a litre less for plain milk. Many had switched from big-name brands to generic-labelled milk, with more people buying bulk three-litre packs, he said. Six months ago, 47 per cent of milk was bought from supermarkets, today that figure has increased to 50 per cent. The increased competition by supermarkets was squeezing many small stores and dairy farmers out of business, according to Small Business Association of Australia spokesman Jonathon Fowlers. "It's demoralising, (milk in supermarkets) is under-priced. If its not urgent people won't buy milk at the corner store,"​ Mr Fowler said. "Then supermarkets use their muscle to force dairy farmers to reduce their milk prices even further."​ Professor Fels said the ACCC was monitoring the situation for signs of "predatory behaviour". However the cost to small business had to be weighed against the benefits to consumers, he said. Source:Asia Pulse