Federal Leichhardt MP Warren Enstch and Queenland Senator Susan McDonald have again come out swinging against MSF Sugar after learning the company has imposed major price hikes on molasses for Australian consumers.
Senator McDonald and Mr Entsch took aim at MSF last week after it was revealed the company would export most of its 2020 molasses yield to Thailand.
This would have left Queensland graziers and dairy farmers in the lurch as they prepared to purchase the syrup for much-needed winter stockfeed.
Thai-owned MSF Sugar then reversed its decision, drawing a collective sigh of relief from farmers but tensions have flared again after they put a price of $250 a tonne on its domestic molasses – about $100-a-tonne more than what it charged last year.
MSF Sugar is also demanding 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.
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.
But 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.
“To make matters worse, MSF Sugar now wants an upfront payment of $100 per tonne, so a business with a 6000 tonne contract is expected to pay $600,000 on confirmation of the pre-order before a single drop is delivered
“On top of all this, the business must 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.
“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.”
Senator McDonald accused MSF of engaging in unfair negotiations.
“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.”