On Monday, Woolworths scrapped its $1 per litre milk, an arrangement that has been disastrous for dairy farmers. Other major retailers have so far resisted pressure to follow suit.
The supermarket giant will indefinitely extend the ‘drought levy’ model applied to $1 milk last year and sell two and three litre varieties of own-brand milk for $2.20 and $3.30 respectively.
The extra 10 cents per litre will go back to farmers via processors.
The announcement follows talks between Woolworths and Australian Dairy Farmers (ADF), the peak body representing the industry.
ADF Chief Executive Officer David Inall said the move represented a major victory for farmers.
“The dairy industry has been suffered from the debilitating effects of $1 milk for eight years, since Australia Day 2011.
“Woolworths should be applauded for having the courage to phase out its $1 milk line, and it is now time for other retailers to immediately do the same. No ifs, no buts,” Mr Inall said.
Agriculture Minister, David Littleproud also called on other retailers to follow Woolworths’ lead.
“All supermarkets should pay a fair price for all dairy – this includes cheese and yoghurt, not just fresh milk, which is a small fraction of the market.
Selling milk at $1 drives down prices to farmers. Selling milk cheaper than water devalues the product and the work farmers put into it.
Despite public pressure Coles will maintain the $1 per litre price structure on brand milk.
“Coles knows that many customers in Australia face cost of living pressures and doesn’t want them to be disadvantaged through price increases,” Coles said in a statement.
“Coles is seeking a long-term solution that does not disadvantage our customers and supports dairy farmers.”
From next week Coles will be collecting donations for dairy farmers at their counters nation wide and will match those donations dollar for dollar.
The National Farmers’ Federation (NFF) said it was time for a larger national discussion about the value we place on our food.
“Australia’s dairy sector is made up of some of the nation’s most efficient and hardest working small businesses,” NFF President Fiona Simson said.
Consumers must be willing to pay just a little extra to ensure a sustainable Australian dairy sector.
In other frothy news…..
On Wednesday, the Labor Opposition said if they were to win Government, the party would ask the Australian Competition and Consumer Commission (ACCC) to investigate setting a minimum or floor farmgate milk price.
“Labor believes government intervention is needed to save our dairy sector and our dairy farmers,” Opposition Leader Bill Shorten said in a statement.
Ms Simson said the NFF were cautious about a return to price regulation.
“Agriculture including dairy is an export reliant industry, prices are dependent on international market forces.
“That being said, we’re certainty open to listening to any advice from the ACCC as to how a floor price would retain the dairy’s international competitiveness and simultaneously ease the challenges currently facing the industry.”