United Dairyfarmers of Victoria (UDV) says the future of some iconic Australian dairy brands could be in jeopardy following the confirmed purchase of Fonterra’s Australian dairy assets by French dairy giant Lactalis.
UDV President Bernie Free said the acquisition could result in product duplication and some existing brands disappearing from supermarket aisles.
“Lactalis is now a global giant of the dairy industry following their purchase of Fonterra and that could spell the end for some iconic local brands.”
“Our farmers produce the best dairy products in the world and I hope this move doesn’t restrict consumers’ access to locally made, fresh Victorian dairy products.”
“It’s hard enough for consumers to find out what products are Australian made and moves such as this make that challenge even more difficult,” Mr Free said.
Mr Free added the reduction in competition is likely to place downward pressure on farmgate prices, leaving producers with less negotiation power and jeopardising farm viability.
“This consolidation of processors raises the risk of rationalisation of processing facilities. Such moves could result in job losses, reduce regional investment, and undermine the infrastructure that has long supported Victoria’s dairy industry.”
“I’m also concerned that increased reliance on imported dairy products may emerge to meet domestic demand. This would not only displace locally produced milk but also weaken the security of Australia’s own food supply,” Mr Free said.
Mr Free said smaller processors could also find their access to toll processing, milk swapping, or supply contracts increasingly constrained, further limiting diversity and competition in the marketplace.
“Reduced product variety and brand choice for consumers are likely outcomes, with no clear evidence that prices will improve or that innovation will be driven by further consolidation.”
“It’s critical that the growing market share of a major processor reinforces the urgent need for strong regulatory oversight of contractual and supply chain practices to ensure farmers, regional communities, and consumers are not left behind.”
“Farmers need fair access to competitive markets and transparent contracts. Without this, the future of the dairy sector and the communities it supports is at real risk,” Mr Free said.