Under questioning from Senator Janet Rice, Fonterra Australia milk supply general manager Matt Watt said the company could have announced an opening price more reflective of market conditions.
Earlier in the Senate References Committee hearing into the dairy industry in Melbourne, Western District dairy farmer Karrinjeet Singh-Mahil said farmers would have adjusted their management if Fonterra had not followed MG’s lead and opened with a lower price more reflective of market conditions.
Rice asked Watt: “You didn’t have to match Murray Goulburn’s price at the beginning of the season, did you?”
“No,” Watt said.
The inquiry was told Fonterra had to match MG’s price only at the end of the season in line with the agreement struck when the New Zealand dairy company bought Bonlac in 2001.
Fonterra velocity and innovation chief operating officer Judith Swales, who previously led Fonterra Australia, said MG’s decision to cut its price in April was “a shock to us”.
“We are extremely disappointed that we were not able to prevent what happened last season.
“We warned farmers about the sustainability of the milk price and the possibility of a step-down.
“We were a lone voice and roundly criticised for talking the industry down.
