Australian corporations are back peddling like mad to regain community and/or supplier trust. The latest example is WOW's so called drought levy on home branded milk. For years now, Australian dairy producers have been calling for farm gate prices that reflect their cost of production and allow for profit. This is one of the best ways of ensuring industry viability: not short term levies, charity or ad hoc government measures.
The sheer strength of the supermarkets' dominance has trashed milk producers' incomes with many exiting the industry. Consumers of these home branded milks haven't been treated much better with the initial price based on the reconstruction of fresh milk to remove the more valuable components and 'standardising' the new product using permeate.
Rather than having a long term policy of paying a fair & equitable price for this commodity, WOW's levy will no doubt be pulled once this 'current' drought ends.
I guess once milk production is further concentrated, then we'll see pricing power shift away from the supermarkets. How that benefits consumers is anyone's guess...
As a LT holder of both WOW & WES, a producer of beef cattle and consumer, I'm probably highly conflicted!
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