Brownes Dairy ‘closely examining’ delivery models in response to Iran war-induced fuel crisis

WA’s oldest dairy, Brownes, has been forced to closely examine the sustainability of its delivery model to cafes, restaurants and other customers in response to the Iran war-induced fuel crisis that has left service stations across the country dry. As the average price of Perth’s regular unleaded petrol jump to 258.3¢/litre on Thursday, from Wednesday’s 256.8¢, and diesel surging past $3/litre, Brownes chief executive Natalie Sarich-Dayton said the fuel volatility proved “a challenge unlike any other”. “Unlike dry goods, fresh milk requires constant refrigeration from farm to fridge, making our fuel needs non-negotiable,” Ms Sarich-Dayton told The West Australian. “While we are currently absorbing rapidly escalating costs to ensure minimal disruption, the sheer scale of these rising operational costs is unprecedented. “To keep milk on the fridge for West Australians we must closely examine the long-term sustainability of our current delivery model and what it takes to keep the milk moving.” Escalating tensions in the Middle East have triggered renewed volatility across global dairy markets, raising concerns about supply disruptions and trade flow through critical maritime routes. For Sue Daubney — managing director of Northcliffe-based Bannister Downs Dairy — the biggest challenge so far had been skyrocketing input costs leading up to seeding. The next challenge will be battling the soaring price of diesel for its delivery fleet. “These are disruptions to supply, on top of this will be the impact of the spike in costs, where diesel has been possible to purchase,” she said. “It’s far from ideal to have additional price increases at a time when Australians are struggling with confronting cost of living increases.” The world’s biggest dairy exporter, Fonterra, is already bracing for supply chain disruptions as the Middle East conflict begins to disrupt shipping and cause delivery delays. Chief financial officer Andrew Murray earlier this week said ships were taking longer to get to the Gulf region and some port closures meant products haven’t reached the correct destination and required land transport. “If it continues for a reasonable period, you may end up having a knock-on effect on global shipping and that will be difficult,” he told Bloomberg. “But at the moment it’s constrained relatively to the actual Middle East destinations.”