Dairy farmers fear being caught in the crossfire as a big Eastern States flavoured milk brand joins forces with local pie maker Mrs Mac's to crack the lucrative WA market.
Parmalat, which produces the Oak and Breaka brands, has done a distribution deal with Mrs Mac's which will give it a big presence in WA lunch bars and convenience stores where most flavoured milk is purchased.
The Parmalat product will come from interstate to compete against brands produced with WA milk in a market worth about $57 million a year.
WAFarmers dairy section president Phil Depiazzi said any move to truck in milk from interstate had potential to lower farm gate prices for local producers.
"It will pinch market share and particularly in higher margin products such as flavoured milk that is of concern, and potentially detrimental to WA processors and farmers," he said.
Mr Depiazzi urged consumers to support local dairy farmers by sticking to brands made from WA milk.
Parmalat, a multinational dairy and food company based in Italy, is planning an aggressive marketing campaign to press home its distribution deal. It will include a $600,000 advertising blitz due to begin next month.
The WA market is dominated by Lion, which produces the Masters and Dare brands, and Brownes, which produces the Chill and Kick brands.
Brownes managing director Ben Purcell, who has led a marketing campaign against interstate dairy products, blasted the move.
"It is disappointing to see a WA company support a foreign-owned, Eastern States-based company in a move that could damage our dairy industry," he said.
"Every litre sold from the Eastern States is milk our farmers could be growing and hurts the local industry. Secondly, it is profit that we would make on flavoured milk that isn't available to support WA dairies."
Parmalat Australia chief executive Craig Garvin hit back, saying it was "a myth to think this will hurt WA farmers".
"WA already brings in milk to satisfy demand and this arrangement represents less than 2 per cent of WA milk supply," he said.
Mr Garvin said if Parmalat's brands were successful the company would pursue opportunities for local production.Mrs Mac's sales and marketing manager Robert West confirmed the distribution deal but declined to comment on the criticism.