Case study: A fair milk price for Tasmanian dairy farmers

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Related areas of service: Campaigning; Government Relations 

Font and its associates ran an intensive campaign to highlight the unreasonable milk price being offered by National Foods to Tasmanian dairy farmers. We devised a comprehensive strategy incorporating numerous elements, which attracted the support of the entire Tasmanian community and eventually led to resolution of the dispute.

The pricing dispute between Tasmanian dairy farmers and National Foods was always going to be a David and Goliath type battle but a comprehensive media and political strategy by Font Public Relations and its associate John Barker made sure that this time it was a win for the State’s struggling farmers.

In July 2009 National Foods offered farmers a new milk price contract at 29 cents per litre – well down from the previous contract of 48 cents per litre. The average cost of producing a litre of milk was 39.8 cents per litre, so National Foods was asking farmers to operate at a significant loss.

On top of this, those farmers who were on contracts that had expired in June were now only being paid 20 cents per litre by National Foods, in a bid to get them to sign up to the 29 cents per litre on offer.

The farmers were determined to fight back.

The dairy farmers (represented by the Tasmanian Suppliers Collective Bargaining Group) engaged Font Associate John Barker in September 2009 to provide strategic advice, campaign development strategies including political and community input, and to prepare submissions to potential senate inquiries.

John brought in the specialised skills of Font Public Relations to provide and oversee media strategy, and Tom O’Meara (former general manager of the Examiner Newspaper and Canberra Times) to oversee the broader campaign perspectives.

Font, John Barker and Tom O’Meara were able to ensure that a comprehensive community, media, legal and political campaign was waged against National Foods and its unfair pricing practices.

The political strategy was to engage all Tasmanian Senators and other key interstate Senators, as well as the leaders of the three Tasmanian Political parties.

Font, John Barker and Tom O’Meara coordinated two Senate inquiries, and also prepared, provided and presented submissions to both inquiries. They also ensured that strategically one immediately followed the other, which had the effect of providing constant and significant media coverage and engendered strong public support.

The leaders of the three Tasmania political parties were briefed and subsequently provided their support to the farmers’ campaign – specifically the Tasmanian Government which contributed $40,000.

A public rally was held in Devonport in October 2009 (following the first Senate inquiry hearing in Devonport), which was attended by the farmers, the public and the leaders of the three state political parties.

National Foods responded with an aggressive print media campaign which falsely attributed the savage price cut to the global economic crisis. On the advice of Font, Barker and O’Meara, the farmers counteracted the campaign by offering a goodwill gesture of accepting a price cut to $39.8 cents per litre (being the cost of production) until the financial situation improved. National Foods rejected that offer.

At the same time we obtained evidence that National Foods’ first half of 2009 profits had increased to $40 Million and its projected full financial year results were for a profit of $176 Million (which it achieved).

Legal advice was also sought from Melbourne-based law firm Allens, Arthur, Robertson regarding alleged breaches of the Trade Practices Act by National Foods and as a result a formal complaint was lodged to the ACCC.

Font, Barker and O’Meara organised for letters of concern from the Tasmanian Suppliers Collective Bargaining Group and Tasmanian Premier David Bartlett to be sent to the principal company of National Foods (based in Japan) and the Japanese ambassador in Australia.

National Foods was unsuccessful in attracting individual farmers to its contract offer of 29 cents per litre and fell well short of the required milk supply that would enable it to bypass members of the Tasmanian Suppliers Collective Bargaining Group. At the same time public outrage at the actions of the company saw its retail market share reduce by around 30 per cent.

As a result National Foods rejoined negotiations, which eventually determined a base price of 38.9 cents per litre. On January 7 2010, National Foods and their suppliers met in Penguin, Tasmania, to sign contracts reflecting the new negotiated price.

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