Dairy Produce Wholesaling in Australia Industry Market Research Report Now Updated by IBISWorld

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Dairy production is expected to increase as drought conditions ease, benefitting dairy produce wholesalers. For these reasons, industry research firm IBISWorld has updated its report on the Dairy Produce Wholesaling industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

Industry growth will stabilise as dairy production increases

The Dairy Produce Wholesaling industry has benefited from increases in world dairy prices over the past five years, but has been adversely affected by a fall in industry production. Declines in milk production have occurred because of drought conditions, and dairy production in Australia and New Zealand has subsequently decreased. According to IBISWorld industry analyst Naren Sivasailam, “the industry's performance has also been impeded by the effect of wholesale bypass, as strong increases in oil prices have affected profitability”. IBISWorld estimates that industry revenue will increase by 2.6% per annum over the five years through 2012-13.

Wholesale bypass involves retailers bypassing separate wholesalers and buying directly from the manufacturer. The large wholesalers in the industry are also the largest dairy product manufacturers. This has increased competition, particularly for smaller, less-efficient specialist dairy product wholesalers. In 2012-13, the largest companies in the industry are Lion Pty Ltd, Murray Goulburn Co-operative Co Limited, Fonterra Co-operative Group Limited and Parmalat Australia Ltd. “Effective wholesale bypass has been aided by the increased consolidation and vertical integration of dairy product manufacturers”, says Sivasailam. Smaller wholesalers play an important role in supplying food-service establishments and smaller retailers and in supplying niche products, which have higher search costs. Wholesale bypass reduces revenue and profitability for the industry.

The future of the Dairy Produce Wholesaling industry will be contingent on a variety of downstream demand conditions and the changing landscape of commodity prices. Domestic dairy product prices are forecast to stabilise as the economic recovery becomes more pronounced and dairy producers reduce the culling rate of herds as farm returns improve. Milk production in Australia is forecast to grow at a strong rate per annum over the next five years, assuming a return to average seasonal conditions. The introduction of new technology will increase the efficiency of the industry. For instance, the industry may benefit from further introduction of radio frequency identification technology to make existing supply chain processes more efficient. The industry will also face increased competition from supermarkets pushing their private label dairy products, particularly as they have the size and clout to bypass wholesalers.

For more information, visit IBISWorld’s Dairy Produce Wholesaling report in Australia industry page.

Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau

IBISWorld industry Report Key Topics

Businesses in this industry wholesale dairy products. Dairy products include milk, cheese, cream, butter, yoghurt, powdered milk, dairy desserts and ice cream. The industry is made up of three different types of wholesalers: manufacturing companies that wholesale direct to clients, wholesalers that are the intermediary between manufacturers and retailers (merchant retailers), and wholesalers that are integrated downstream into retail.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
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