The competition watchdog has warned dairy processors not to mislead farmers on milk prices, raising concerns inflated rates are being passed on to consumers.
The Australian Competition and Consumer Commission’s dairy inquiry found all contracts for milk supply allow processors to pass-through movements in farm gate prices to supermarkets.
‘‘Dairy processors need to be honest with farmers,’’ ACCC chair Rod Sims said.
‘‘We have written to a number of processors warning them not to mislead farmers by blaming private label milk contracts for the prices offered for milk at the farm gate,’’ he said.
‘‘We’re concerned this is misleading, as the power lies with processors to raise the farm gate price paid to farmers, and then pass these higher farm gate prices on to supermarkets.’’
Farmers sell products to dairy processors who process and package the product, before on-selling to supermarkets for sale to consumers.
The ACCC’s warning comes after an 18-month inquiry into the industry, with the findings released in April.