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The Australian dairy industry is losing out to New Zealand in the massive, growing Chinese market, according to the managing director of Australia’s largest dairy company Murray Goulburn Co-operative, Gary Helou.

Helou was quoted saying on the Stock and Land website that Australia’s failure to negotiate a Free Trade Agreement with China meant it paid tariffs of 10 to 15 percent on dairy exports, compared to NZ that now paid 6-8 percent and in five years would pay none.

“We can’t compete behind that brick wall,” Helou told the Gardiner Foundation Australian Dairy Leaders Luncheon in Melbourne on Monday.

“We need to fix that and we need to fix it pretty quickly.”

Helou also identified supermarkets and the rise of private label brands and the number of processors in Australia as problems for the industry.

He said he was committed to cut more than AUD$100 million in costs from the company to make it a cost leader so that it could return higher prices to its farmer suppliers.

“I am absolutely determined to squeeze those internal parameters for benefit of maximising value and maximising milk prices for our shareholders,” he said.

And he outlined a vision for the dairy giant that would see it as the “first choice dairy food company” in a range of markets, including branded retail and value-added products.

Murray Goulburn was “very good at busting up milk into ingredients” but it also needed to develop an outward focus.

“I think there is something else out there, particularly as we see consumer demand for our products go through the roof,” he said.

“So a market branded and differentiated international business to capture value and value-add, I think that’s going to be our plus.”

He also planned to revitalise the company to expand dairy into every food application – breakfast, lunch, dinner, liquid foods, beverages, ingredients and pharmaceuticals.

And that opportunity would not just be in Australia but in export markets, particularly into Asia, where there was huge potential.

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