NSW milk producers can join Qld
NORCO chairman Greg McNamara doesn't think any of its members will desert the co-op after the competition watchdog reaffirmed that Queensland-based Premium Milk could source milk from northern NSW dairy farmers.
The Australian Competition and Consumer Commission yesterday announced that dairy farmers in northern NSW could join the collective bargaining group.
Premium Milk, which also represents dairy farmers in Queensland, supplies milk to dairy producer Parmalat.
“It just means if milk supplies dry up in Queensland, they will look for supplies in NSW,” Mr McNamara said.
“It will put more competitive pressures on Norco to meet the market price for milk.”
ACCC chairman Graeme Samuel said the watchdog believed collective bargaining arrangements were likely to increase the power of farmers when negotiating contracts.
Mr McNamara agreed, but played down the effect it may have on Norco's bottom line, adding there were three bargaining groups based in Queensland.
He said in the past some of Norco's members had left to join a collective bargaining group, and vice versa.
Norco sources its milk from 170 farmers across Northern NSW and Queensland. It is different from bargaining groups as not only does Norco purchase the milk, but also processes it.
“Norco goes from the farm gate all the way through to the customer,” Mr McNamara said.
“We purchase it, pay for it, manage the logistics and manufacture of it, and delivery to the customers. Whereas collective bargaining groups manage the price they get for that milk.”
Norco posted a profit of $1.1 million last financial year, up from $1 million the previous year.