The NSW Dairy Connection Report on the Roundtable debate with Michael Lambert and Yasmin King
Michael Lambert is from the UK and has been Chairman of the National Farmers Union Dairy Committee.
Yasmin King is the NSW Small Business Commissioner.
Present were Dairy Connect representatives from Vendors, Farmers, Processors and Associate members. There were also representatives from both Coles and Woolworths, DIAA, Dairy Australia and representatives from the Dept. of Trade & Investment – Small Business Commission.
The discussion with Michael Lambert included;
1. The UK Code of Practice for contractual relationships for buying milk has been a successful strategy.
- The supermarkets have resisted this code in the first instance but have become more comfortable with it over time.
- The code is voluntary but has been widely adopted.
- The code can be read here http://www.dairyuk.org/code-home
- There is a Supermarket Ombudsman, in fact an Ombudswoman.
2. The need for product innovation.
- All dairy companies need to innovate to continue to attract consumer interest
- Australian branded milk products have been disinclined to innovate since the $1 milk
- Consumers are interested in locally derived dairy products
- We need to work together with retailers to develop specialty products designed for customers needs.
3. The decline of Manufacturing capacity in NSW was highlighted as an issue
- The Northern Dairy Industry group under Dairy Australia is investigating this
4. Private label milk is about 70% of the UK market
- It is about 55% of the Australian market and it was not forecast to rise much above that. Private label milk sales will probably not go to 70%
- There are still opportunities for branded milk sales here in Australia
5. The Route trade in the UK has been heavily impacted by Private Label milk
- The development of Hypermarkets in the UK where consumers are fully serviced in one centre or one store is the trend
- There is heavy dependence in the UK on the motor car. If the elderly or young don’t have a car then they are forced to buy in the High street at higher prices
6. The Private Label milk sells in the supermarkets for about 90pence and the branded milk sells for about £1.10.
- The gap between route trade milk and supermarket milk price is not as high as it is in Australia
7. The UK is only about 80% self-sufficient for dairy.
- There is little fresh milk imported but there is mostly cheese and other manufactured products imported.
- It is difficult to import milk to the UK because of the Red Tractor program that enforces British Farm Standards
- The processing sector has been consolidated into entities such as Wisemans, Muller from Germany and Arla from Denmark.
Yasmin King reflected on NSW milk market
- The Small Business Commission has been conducting research on the NSW milk market to better understand the supply in NSW as it relates to the rest of Australia Dairy Connect Ltd 66 Devonshire St, Surry Hills. 2010. 0418 657111 02 92814811 ceo@dairyconnectnsw.com.au www.dairyconnectnsw.com.au Twitter: @DairyConnect Facebook: DairyConnect NSW
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