The ACCC identifies one issue of concern - Markets for the acquisition of raw milk from farmers in the south west region of Victoria and central and south east regions of South Australia. The ACCC also raises one issue that may raise concerns - bulk supply of raw milk to dairy product manufacturers.

On competition issues in acquisition markets, the ACCC is concerned that with the acquisition that if Murray Goulburn subsequently reduced the prices it offers for raw milk and/or other non-price benefits post-acquisition, it would be unlikely that competing processes would have the ability and incentive to compete.

Who are these competitors? The ACCC names Fonterra, National Foods, UDP and Bega. What are these competitors?  National Foods, UDP and Bega are investor owned. Fonterra is a co-operative in New Zealand - not in Australia.

Murray Goulburn is the price-setter in farmgate prices and yet the ACCC has an inability and/or unwillingness to recognise this reality - that co-operative ownership is in the best interests of farmers.

The australian dairy industry has moved from a position where many processors were farmer co-operatives to the current situation where most processors are subsidiaries of foreign corporations. in a recent report, Milking it for all it's worth - competition and pricing in the Australian dairy industry (13 may 2010), the Senate Standing Committee on Economics  concluded: "The interests of farmers would be better served if there were more processors and preferably more of them in the form of co-operatives." 

The Committee has recommended "that the Federal Government commissions an independent report into the main impediments to the establishment of new processors owned by farmer co-operatives and how these impediments could best be overcome and requests that the report be tabled by 30 April 2011."