Woolworths to end $1-a-litre milk sales to support struggling dairy farmers

Headshot of Daniel Newell
Daniel NewellThe West Australian
It will start removing the cheap milk nationwide from tomorrow.
Camera IconIt will start removing the cheap milk nationwide from tomorrow.

Supermarket giant Woolworths has announced it will axe $1-a-litre milk sales and put extra money back into the pockets of Australia’s struggling dairy farmers.

It will start changing the price of its cheap milk nationwide from tomorrow.

Woolworths, along with Coles and Aldi, has copped a lashing in recent months from Agriculture Minister David Littleproud, who has criticised the major grocery players for not doing enough to support diary farmers hit hard by rising costs and drought on the east coast.

The West Australian revealed this morning that Ross Woodhouse, WA’s biggest dairy farmer, has called time on the industry saying long working hours and poor financial returns had forced him out.

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Australian Dairy Farmers chief executive David Inall described the move to end cheap milk sales as a “game changer in the fight against discount dairy that has long frustrated the industry”.

Woolworth will now sell 2lt and 3lt varieties of its own-brand fresh milk for $2.20 and $3.30 respectively, promising “every cent of the increase will end up with Australian dairy farmers”.

It said the price change would deliver higher milk prices to more than 450 farmers supplying into its own-brand fresh milk.

“It is reassuring that Woolworths has committed to deliver the full 10¢ a litre increase back to those farmers who supplied the milk into that product category,” Mr Inall said.

“Removing $1 milk is not just intended to restore farmers’ financial confidence, but it will also boost confidence in regional communities and small businesses that rely on the industry.”

Woolworths Group chief executive Brad Banducci said the grocer had heard through consultation with industry players that the outlook would continue to be extremely tough for Australian dairy farmers.

“This is affecting milk production and farm viability, which is devastating for farmers and the regional communities in which they live. It’s clear something needs to change and we want to play a constructive role in making this happen,” Mr Banducci said.

The latest National Dairy Farmer Survey found farmer confidence in the future of the industry had dropped from 75 per cent to 47 per cent over the past four years. About 40 per cent of dairy farmers did not make an operating profit in the 2016-17 financial year.

Mr Littleproud said he hoped the decision by Woolworths marked “the beginning of the end” to the “$1 milk disaster”.

“Coles and Aldi continue to sell milk at $1. This drives down prices to farmers,” he said.

“Supermarkets can’t pretend selling milk cheap doesn’t hurt farmers and they’ve got to be called out on this rubbish.

“Consumers have the power here. If everybody who clicks ‘like’ on a Facebook video bought branded milk instead of cheap supermarket brand milk, or punished Coles and Aldi by going elsewhere, big changes would occur overnight.

“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 cheaper than water devalues the product and the work farmers put into it.”

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