A strike by dairy workers may create “significant disruption to supply of milks, cheeses, yoghurts and ice creams” if workers and employers don’t reach an agreement before the end of a two-day strike on Wednesday and Thursday.

Some 1400 dairy workers will strike at 12 dairy product-producing sites across regional Victoria after they voted in favour of industrial action last week.

Popular products produced at the sites — which are owned by Peters Ice Cream, Fonterra and Saputo Dairy Australia — include Cheer cheeses, Sungold milk, Coles cheese products, Devondale cheese, YoPro yoghurt and Woolworths home-brand milk and cheese.

Tim Kennedy, national secretary of the United Workers Union (UWU), said workers are likely to extend their strike if their demands aren’t met.

“If we don’t find an agreement after 48 hours or discussions don’t look promising, the workers will have meetings again,” Kennedy said.

“They’ve already foreshadowed that if they meet again, one of the things that will be on the table is voting to continue the action.”

The workers are pushing for a 15 per cent pay rise across three years, increased personal leave and community service leave for regional workers to assist with disasters and recovery.

Kennedy said if the strike continues there “will be significant disruption to the supply of milk, cheeses, yoghurts and ice cream,” because dairy products are perishable.

“The companies can find a solution. The position of the workers is quite reasonable,” he said.

“It’s not even going to hit the inflation rate at the moment, what they’re seeking to settle on at the moment.”

Industrial action

Rob Howell, supply chain and operations director at Fonterra Australia, said the company is disappointed the union has encouraged industrial action, but respects its right to do so.

“We have a fair and reasonable offer on the table of a minimum 10.5 per cent salary increase over three years, plus more leave options and greater protections for our workers,” he said.

“We were also committed to our people during COVID-19, and provided them with pay increases of 2.5 per cent, 2.5 per cent and 2.75 per cent in 2020, 2021 and 2022 respectively.”

Woolworths home-brand milk is one product that may be affected by the strikes. Photo: Woolworths

Kennedy said strike action of this scale hasn’t occurred in “recent memory” within the dairy industry.

“These workers, like many essential workers during the pandemic, stood up, turned up to work on time and because of that very uncertain period, they took very low wage increases,” he said.

“They’ve been suffering below cost-of-living wage increases now for a decade.”

Fonterra, a New Zealand-based multinational, posted a profit of $1.6 billion in the 2023 financial year, while Saputo Dairy’s Australian division earned the Canadian company over $3 billion in revenue last year.

A spokesperson for Peters Ice Cream, whose Mulgrave factory is affected by the strike, said the company was surprised “by this unnecessary union-led blanket action”.

“The business and its employees have continued to negotiate in good faith and remain open to do so,” the spokesperson said.

“Peters offers the best employment conditions in the ice cream industry, paying its factory workers 70 to 80 per cent above award; with moderate overtime this equates to an average annual salary of $120,000.”

Will shortages occur?

The real question is if the strikes will affect the supermarket shelves, and Gerard Lourey, Saputo Dairy Australia director of operations, said the company remains committed to negotiating in good faith and resolving the strike “amicably and swiftly”.

“We are focused on collecting and processing every litre of milk possible and are working collaboratively with farmers and industry to ensure we have a home for suppliers’ milk during the industrial action,” he said.

“We are also actioning contingency measures to minimise business disruptions and keeping our customers, business partners and farmer suppliers updated on any temporary impacts they may experience.”

A spokesperson for Coles said the company is “continuing to work closely with our suppliers to help ensure milk is available to our customers”.

Woolworths expects any disruptions to be localised to Victoria, and a spokesperson for the company said it is working on contingency plans “to minimise any potential disruption to our customers”.

Fonterra Australia has mobilised a “cross-company team to ensure that there are minimal disruptions as a result of this industrial action”, Howell said.

“We are confident that the supply of our dairy products will continue during the industrial action and will be working closely with our customers to keep them updated.”