Australia’s competition watchdog has reportedly called for the investigation into milk pricing to be widened to include the country’s biggest milk processors as well as retailers.

The news comes in the midst of a Senate inquiry into the Australian dairy sector and follows claims from farming representatives that “government inaction” has permitted the country’s largest supermarkets – Coles and Woolworths Ltd – to abuse their market power.

However, according to a report in MoneyWeek Magazine, Australian Competition of Consumer Commission chairman Graeme Samuel has said that, while the focus to date has been primarily on retailers, “we’ve actually got to start looking at others in the supply chain”.

Samuel said: “We want to be sure that the consumer gets the benefits of real aggressive competition, not workable competition. We want to ensure that the farmer doesn’t get put to the power and the weight of these major corporations, primarily the big processors.”

The ACCC is expected to give evidence before a Senate Economics Committee’s inquiry into milk discounting tomorrow (9 March).