The Australian Competition and Consumer Commission has confirmed the findings of its report on the impact of farmgate deregulation on the Australian milk industry following a review of additional information.
The review of the report's methodology and findings was undertaken following approaches from some milk processors and dairy farmers. In particular, concerns had been expressed that the ACCC may not have been aware of additional payments of rebates by processors to supermarkets.
Milk processors provided the ACCC with additional information about payments made to supermarkets. This information showed that the ACCC’s assessment in the report had taken into account the effect of the rebates paid by processors. On the basis of the information available, and a review of the methodology used for monitoring, the ACCC has no reason to doubt its conclusions on the profitability of supermarkets.
In a limited number of cases, the ACCC discovered rebates of which it was not previously aware. However, the value of those rebates was not significant enough to change the ACCC's aggregate measures of the impact on margins at each level of the industry - the farm gate, processing and retail. In particular, the report's finding that on an aggregate basis, the gross profit margins earned by supermarkets on sales of milk were reduced following farmgate deregulation still stands.
The ACCC is confident that the report's conclusions are robust.