QLD: Milk industry deregulation begins tomorrow

AAP General News (Australia)
12-31-1998
QLD: Milk industry deregulation begins tomorrow

BRISBANE, Dec 31 AAP - The fresh milk market in Queensland will be partially deregulated
from tomorrow, but it's feared the long-term result could be higher prices.

The changes introduced as a result of national competition policy will affect distribution
and pricing and allow new players into the market, including major milk producer National
Foods.

But while prices may fall in the short term in the battle for market share, farming leaders
have warned prices could rise by up to 20c a litre over the next two or three years as
retailers strive to improve their currently slim margins.

Queensland consumers currently enjoy the cheapest milk in Australia under the system of
rigid price controls that have regulated the market for 60 years.

Queensland's largest milk producer is Pauls Limited, taken over by international food giant
Parmalat earlier this year.

Pauls has been the dominant brand in the marketplace to date with a 60 per cent market
share, followed by Dairy Farmers with about 30 per cent.

From tomorrow, the major supermarket chains will be stocking their own house brand milk, as
part of a wider range of milk products being offered in the deregulated market.

The price of milk at the farm gate will remain fixed for the next five years, but local
producers fear many will be forced out of the industry in the longer term in the face of
cheaper milk from the major dairy-producing state, Victoria.

AAP plr/it

KEYWORD: MILK QLD

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