Tasmania farmers urge National Foods boycott as talks fail

Dairy farmers are urging Tasmanians to step up a boycott of National Foods, after they walked out of milk price negotiations following their marathon talks hitting a deadlock last night.

Emotions were high after the nine-hour meeting at a Devonport motel between representatives of National Foods and the Collective Bargaining Group, which represents farmers.

Group chairman Kem Perkins said National Foods' attitude was disturbing as it had thrown out the farmers' alternative proposal. "The loyalty of farmers for 50 years means nothing," Perkins said last night.

National Foods offered to increase its milk price but farmers say it would still be below their cost of production. "We will go broke if we sign these contracts, we are signing a contract to go broke," said dairy farmer spokesman Phil Beattie. "Who would do that in their right mind? Nobody would."

Farmers have asked for 39.8 cents a litre of milk. National Foods said they had offered 37.5 cent a litre, which included a $1.1 million "charity payment" programme. "To go significantly further would seriously undermine the competitiveness of our business," corporate affairs general manager Geoff Lynch said.

But farmers said that was a fabrication and the offer was worth only 34.2 cents because National Foods had been factoring in bonus payments. "What they offered is 37.5 cents for 52 per cent of the milk and 31.2 cents for the other 48 per cent," Beattie said.

And he said they had not backdated any rises. "We don't want charity payments. Yes, $1 million sounds like a lot but overall it means we're short of $7 million."

But Lynch said National Foods was making a very good offer in the context of the market. "We know that dairy farmers are having it tough as a result of oversupply, the slump in the international price of dairy commodities, and the very wet weather, and we took these into account," Lynch said.

But Perkins said the offer was "smoke and mirrors".