Parmalat Australia was granted the contract in July over Atherton Tablelands processor Lion Dairy.
It was a decision that meant milk would need to be shipped thousands of kilometres from Brisbane through Rockhampton to the far north, while at the same time Tablelands dairy farmers would have to pay freight to send their excess milk south.
The CEO of the Cairns and Hinterland Hospital and Health Service, Clare Douglas, said it has now decided it would not be proceeding with the new dairy supply agreement.
“The Health Service will be returning to our existing suppliers,” Ms Douglas said.
“A new procurement tender process will be conducted within 12 months.”
New tender process to take place under buy local policy
The KAP member for Dalrymple, Shane Knuth, who lobbied the Queensland Health Minister Cameron Dick on behalf of Tablelands dairy farmers, said he was confident Lion Dairy would be awarded the contract once the State Government’s buy local procurement policy comes into effect in September.
“He [Minister Dick] had indicated that they would be looking at all the legal aspects and I believe they did defer the contract for one month,” he said.
“What I’m advised is that the Government had indicated that they would review the contract under the provisions of their new procurement policy, which is to buy local so that basically covers the contract again.”
A spokesman for Health Minister Cameron Dick said he was unable to comment on contractual matters.
But Queensland Dairy Farmers director, James Geraghty, who is also a Tablelands dairy farmer, welcomed the news and said Parmalat should not have been awarded the deal in the first place.
“It’s just a reversal of an unnecessary stress on local farmers and how it ever happened is beyond me,” Mr Geraghty said.
“However, if this contract has only been reversed because of public pressure it’s the wrong way to go.
“If all we’ve got to do to reverse a contract the Government awards is whinge, that’s the wrong way so I hope there was a fundamental flaw in the awarding of this contract.”
A spokeswoman for Parmalat Australia said it had been notified the contract would be re-tendered but would not make any further comment as it investigates its legal position.
Queensland Government under pressure to drop buy local policy
Mr Geraghty is concerned the return to Lion Dairy could be short-lived as the Federal Government pressures the Palaszczuk Government to drop its buy local procurement policy.
The Cairns-based Member for Leichhardt, Warren Entsch, is among those concerned it will risk free trade deals, including exports from Queensland, by penalising international suppliers vying for Queensland Government supply contracts.
“What are the ramifications if the countries came back and said ‘Rightyo the State Government’s going to do this, put a 30-per-cent tariff on everything that we’re going to tender for, [but] we’re going to reciprocate and do the same thing’?
“We’ve already had the New Zealand trade minister in Canberra lodging a complaint about it and reminding us that there is nearly $115 million worth of Queensland contracts for supplies to the New Zealand Government.”
However, the Queensland Treasurer, Curtis Pitt, said the new policy had a strict focus.
“This policy doesn’t have any implications for free trade in things like beef or coal of sugar,” he said.
“What it does do is give local Queensland suppliers a waiving of up to 30 per cent on any tender lodged for a significant procurement.
“This isn’t wide-ranging things or broader trade agreements; this is about government procurement and there is a special free trade agreement for government procurement.”
Source: ABC Rural