4 May, 2020
TRC accuses MSF of unfair practices
Senator Susan McDonald has accused MSF of engaging in unfair practices.
TRC accuses MSF of unfair practices
Last week MSF Sugar was being congratulated on reversing its stance on selling molasses to local farmers.
Originally MSF had told its Australian customers that their molasses orders would not be considered in the 2020 cane crushing season and it would only sell molasses to farmers who supplied cane to its and send the rest to Thailand where its parent company, Mitr Pohl, is located.
The decision sparked widespread outrage among northern graziers, dairy farmers and politicians.
After pressure from Queensland Senator Susan McDonald and consumers, the company reversed its stance.
Congratulations quickly turned to condemnation when MSF announced the price it would sell its molasses to local farmers was to be increased drastically.
MSF announced a price of $250 a tonne, about $100-a-tonne more than what it charged last year.
Senator McDonald accused MSF of engaging in unfair practices.
“Every signal they’re sending is that they do not want to supply molasses to the domestic market,” she said.
“It was great that they reversed their decision to export most of it, but it now looks like they’re trying to price our primary producers out of the market and export the molasses anyway.
“I’ve been told the price reflects MSF’s expectations for a tough business year but it beggars belief they’ve set such a high price that it will likely exclude Australian customers.
“I have written to the Agriculture Minister David Littleproud and I’ve spoken to the ACCC about what I believe is unfair conduct by MSF.
“I again ask the company to review its policy and do the right thing by Australian graziers and dairy farmers.
“Be fair, be reasonable and do the right thing.”
At last week’s Tablelands Regional Council (TRC) meeting Councillor Kevin Cardew submitted documents to the council in which he wrote:
“MSF Sugar has increased their price to $250 a tonne, about $100 a tonne more than what it charged last year.
MSF Sugar is also requiring that Queensland Customers lodge a $100 a tonne deposit and take delivery of all their orders before Christmas, even if they don’t have enough storage tanks
A local wholesale distribution business with a 6000-tonne contact is expected to pay $600,000 on confirmation of the pre-order in May before a single drop is available for collection.
The business will also need to collect the entire order by 11 December 2020 and store it themselves, at additional cost, for at least six months before the mill reopens again for the 2021 crushing season.”
Councillor Cardew also submitted a draft motion without notice, asking that the TRC write to the Federal and State Government, FNQROC and to MSF directly expressing councils dismay at the recent changes to price and contract terms.
Federal Leichhardt MP Warren Entsch said MSF Sugar was pressured into continuing to supply the domestic market by Minister Littleproud after announcing its intention to supply only for the export market from June 2020.
However, he said the devil was in the detail.
“Like the fuel companies, MSF Sugar has been caught red-handed gouging its customers,” Mr Entsch said.
“MSF Sugar confirmed in writing they would supply molasses at ‘market price’ but they are the ones setting the price.
“For example, a business that is currently purchasing molasses at between $125 and $145 per tonne is being forced to pay $250 per tonne.
“MSF Sugar is setting unachievable targets for domestic users in an under-handed way to get the initial outcomes they wanted, it is totally and utterly unethical and needs to be stopped.
“I fully support Senator McDonald’s call for an immediate ACCC investigation, and I hope they get the book thrown at them for their behaviour.”
MSF responded with a written statement.
“MSF Sugar’s molasses production is relatively small compared to other Australian sugar milling companies, but in any event, to ease concerns regarding the ability of Australian farmers to source domestically produced molasses, I confirm that MSF Sugar intends to supply the domestic market in 2020 and beyond. Molasses will be available for sale domestically and internationally for the market price, which may trend up or down depending on supply and demand.”