The long-awaited Senate Economics committee report into the impact of supermarket price decisions on the dairy industry paints a gloomy picture unless action is taken to ensure its survival.

The Nationals Senator for New South Wales John Williams says he is deeply concerned that the Coles vs Woolworths milk price war has impacted on the sustainability of dairy farmers, milk vendors and processors.

Woolworths told the inquiry it was concerned the price war would affect dairy farmers but it had to react after Coles announced on Australia Day that it would cut the price of fresh milk.

Senator Williams said while Australians can purchase fresh milk for only $1 a litre at present, in the longer term they will be paying significantly more because there will be less farms producing fresh milk.

“Evidence to the committee revealed Australia has around 7,500 dairy farms now compared with 22,000 in 1980. Milk production has fallen from over 11 billion litres 10 years ago to around 9 billion litres a year ago.

Coles and Woolworths command 80% of the nation’s dry packaged grocery market. They have been allowed to profit at the expense of smaller competitors and their hunger for profits and market share is increasing.

The Senate report contains a number of recommendations including that the government initiate an independent review of the competition provisions of the Competition and Consumer Act 2010, and a review of the effectiveness of collective bargaining laws and arrangements for agricultural industries.

Today it is milk. Tomorrow it could be any other product that is sacrificed to the detriment of an Australian industry and jobs”, Senator Williams said.

*To access the report http://www.aph.gov.au/Senate/committee/economics_ctte/dairy_industry_supermarket_2011/report/index.htm