Supermarkets facing a potential royal commission following drought levy milk scandal

Supermarkets facing a potential royal commission following drought levy milk scandal

After Federal Agriculture Minister David Littleproud tore into supermarkets yesterday over a "disappointing" drought levy on in-house milk, members of the government are calling for a royal commission into Australian supermarkets.

In parliament yesterday, Queensland Nationals MP Lew O'Brien said there is nearly enough outcry to support a royal commission into Aussie supermarket chains Coles and Woolworths.

O'Brien condemned Coles and Woolworths for failing to follow through on a 10 cent "drought levy" for all brands of milk.

"Instead they have quarantined the levy, only applying it to some of their private label milk, taking consumers away from branded milk," O'Brien told parliament on Wednesday night.

He described the "tricky and cynical" move as further proof of the need for a royal commission into the way supermarkets are affecting farmers.

"The evidence is mounting for a royal commission into the predatory purchasing practices and pricing policies by these supermarket giants that are destroying farmers," said O'Brien.

"Those who deal with these supermarkets are fearful of speaking out about unfair practices, and a royal commission would change this oppressive culture."

Deputy Prime Minister Michael McCormack said he was open to supporting a royal commission, but did not grant his complete support for the inquiry.

"We'll see that, we'll discuss that obviously in our partyroom, and we'll reach a position," he told Sky News on Thursday.

"I have to say Coles and Woolies do provide a lot of support for those farmers, many of whom would just be trading on farmer's markets in their local towns.

"But we'll have that discussion and see where it takes us."

Federal Agriculture Minister David Littleproud called out Coles on Monday for its "milk levy" which he says won't even go back to farmers.

Littleproud also criticised German supermarket giant Aldi which sells cheap milk without participating in any dairy reform at all.

"For Coles to pretend I wasn't aware of their most recent 'system' to get milk to farmers is BS," says Littleproud.

"I couldn't give a rats if Coles want to criticise me for calling out their media stunt - they make millions of dollars a year from farmers and if I have to go to the media to call out their slippery corporate behaviour then bad luck."

"Obviously, Coles' first lazy idea was to just give money to the NFF and hope they'd sort it out which didn't happen."

"I'm well aware their recent announcement includes a Coles 'independent' person who will look at the grant applications from farmers, but Coles is still forcing farmers to apply for grants which farmers will see as welfare, and Coles has no way of knowing which farmers supply it what milk because Coles deals with a processor, not individual farmers."

"Farmers want fair trade, not aid."

Coles was quick to fire back at the comments, sparking a war of words.

"It is disappointing that the minister has chosen to criticise Coles - which has already committed over $12 million for drought relief - before becoming familiar with the facts," a Coles spokesman said.

Aldi said in retaliation that it was working directly with suppliers to ease pressure on farmers by accepting price increases.

Woolworths has added a 10-cent-a-litre levy to the two and three litre varieties of its own $1 a litre milk, with funds collected so far through the levy being distributed to more than 280 drought-affected dairy farmers.

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