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Dairy Produce Wholesaling in Australia Industry Market Research Report Now Updated by IBISWorld
  • USA - English


News provided by

IBISWorld

Dec 11, 2013, 14:00 ET

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IBISWorld Market Research
IBISWorld Market Research

The deregulation of milk prices has led to a restructure of the dairy sector.

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Melbourne, Australia (PRWEB) December 12, 2013 -- The Dairy Produce Wholesaling industry has benefited from increases in world dairy prices over the past five years, but has been adversely affected by the volatility in industry production. Declines in milk production have occurred because of drought conditions, and dairy production in Australia and New Zealand has subsequently decreased. The industry's performance has also been constrained by the effect of wholesale bypass, and strong increases in oil prices have affected profitability. Industry revenue is projected to increase at an annualised 2.3% over the five years through 2013-14 to total $988.3 million.

IBISWorld industry analyst Ryan Lin states “the increasing market power of supermarkets over the past five years has led to the rise of wholesale bypass, with large retailers buying directly from the manufacturer. The increasing instances of wholesale bypass have also driven the increased consolidation and vertical integration of dairy product manufacturers.” As large supermarket chains such as Woolworths and Coles grow in market power, they are increasingly able to bargain with industry wholesalers and manufacturers. As a result, in 2013-14, industry revenue is expected to increase by only 0.6%. The growing powers of grocery wholesalers such as Metcash will also weigh against the industry, as they compete with dairy wholesalers. The future of the industry will be contingent on a variety of downstream demand conditions, and the changing landscape of commodity prices. According to Lin, “domestic dairy product prices are forecast to stabilise as the economic recovery becomes more pronounced.” Dairy producers are likely to 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 industry will also face increased competition from supermarkets pushing their private-label dairy products, particularly as they have the size and clout to bargain for cheaper wholesale prices or bypass wholesalers altogether.

The Dairy Produce Wholesaling industry has a low level of market share concentration. This is due to the highly fragmented nature of the industry, and the geographical focus of many industry players. IBISWorld expects that this low level of concentration will remain for the foreseeable future in the absence of regulatory change. The dairy sector has undergone a major restructure in response to deregulation of milk prices, reduced government assistance to the dairy industry and increased exposure to both domestic and international market forces. As a result, dairy farms have generally become larger and more efficient, with the merger of several large dairy cooperatives and manufacturing companies. 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

This industry consists of businesses that act as the intermediary between manufacturers and retailers that primarily wholesale dairy products. Dairy products include milk, cheese, cream, butter, yoghurt, powdered milk, dairy desserts and ice cream.

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.

Gavin Smith, IBISWorld, +61 396553838, [email protected]

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