Coles, Woolworths reveal big increase in price of milk as cost of living crisis bites
Milk has become the latest staple to fall victim to the cost of living crisis, with supermarket giants Coles and Woolworths both announcing big price hikes for own-branded milk.
Coles said on Thursday it had been forced to increase prices amid rising packaging and transport costs.
The price of Coles’ 3-litre fresh milk will jump 60¢ — from $3.90 to $4.50 — while 2L bottles will jump 50¢ to $3.10.
Its 1L fresh and life-long milk will rise by 25¢.
“Raising prices is never something we do lightly, however the increased supply chain costs we are seeing, including higher payments to dairy farmers and processors, have necessitated these increases on Coles brand milk products,” chief commercial officer Leah Weckert said.
“We know customers are facing increased cost of living pressures and Coles remains committed to continuing to deliver great value to our customers.
“The feedback we’ve received from farmers and processors following the recent increases in farmgate and wholesale prices has been very positive, and we hope customers will help us continue to support them by purchasing their great quality Australian milk.”
A Woolworths spokeswoman also said farmgate prices paid to dairy farmers had risen significantly this season and the retail giant was as a result paying its own brand suppliers more for milk.
“Across the dairy cabinet, brands have already increased their retail prices to reflect higher wholesale costs across the entire industry,” she said.
“We’ll be adjusting the price of our own Woolworths brand milk in the coming days to reflect these higher costs as well.”
As of Friday, Woolies’ 1L home-brand milk will jump from $1.35 to $1.60 while 2L bottles will climb from $2.60 to $3.10, and 3L bottles from $3.90 to $4.50.
Rabobank senior dairy analyst Michael Harvey said in his company’s July agribusiness update that Australian milk production was down 3.4 per cent for the season, with falls in all states except NSW.
Resulting record milk prices in all states and territories were putting pressure on margins in retail and food service businesses, Mr Harvey said.
Also on Thursday, Bega Cheese said farmgate price increases would affect all Australian dairy companies, and was already being reflected in higher product prices in retail and food service markets.
“There is the ongoing cost pressures of robust competition amongst dairy processors for milk,” Bega Cheese said.
Last week, a leading consumer psychology expert predicted shoppers were set to ditch premium brands and restaurants as they looked for ways to save their pennies as the cost of living continued to rise.
Curtin University associate professor Billy Sung told The West Australian consumers typically cut back on discretionary spending as inflation, rising housing costs and petrol prices crunch household budgets, giving “experiential products and services” the boot.
News of Coles’ milk price increase comes just a day after Bunnings agreed to a price hike for sausage sizzles served up by community fundraisers at more than 300 of its stores.
More than 100 community groups had lobbied for the increase from $2.50 to $3.50 as the rising cost of supplies had started to bite into the amount of money they could raise.
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