Coles won’t follow Woolworth’s lead

Rose Brennan and Mitchell Van Homrigh - AAPCountryman
A banner advertises two litre bottles of milk for two dollars a litre at Coles.
Camera IconA banner advertises two litre bottles of milk for two dollars a litre at Coles. Credit: Bloomberg, Ron D'Raine/Bloomberg

Supermarket giant Woolworths has thrown struggling Australia dairy farmers a major lifeline by scrapping its $1-a-litre milk.

Pressure is now mounting on Coles and Aldi to follow suit and also increase prices to $2.20 for two litres of milk and $3.30 for three litres.

But on Monday night, Coles would not commit to following Woolworth’s lead, with a spokeswoman saying they were looking for a “better model” that “does not disadvantage our customers and supports our dairy farmers’’.

The phase out of $1-a-litre milk will begin at Woolworths today, with more than 450 Australian dairy farmers who supply milk to the supermarket now set to pocket an extra 10c per litre.

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The charge was set during a milk price war that broke out among Australian supermarkets in 2011 when Coles slashed their price of a litre of milk to $1.

Farmers and politicians, including former National leader Barnaby Joyce, have been aggressively campaigning for the dirt-cheap price to be scrapped arguing it was killing the industry when combined with crippling drought.

“(This is a) very good first step (from Woolworths) and most appreciated, but certainly more is required,” Mr Joyce said. “Coles needs to follow suit, as does Aldi.”

NSW Primary Industries Minister Niall Blair has also called for Aldi and Coles to scrap $1-a-litre milk.

“Woolworths has taken an important step in recognising the damage done to the dairy industry with $1 per litre milk — it devalues the product and sends a misleading message to consumers,” Mr Blair said.

“We all happily pay more than $3 for a coffee or even a beer but for too long milk has been undervalued by the retail sector.”

Woolworths Group CEO Brad Banducci said the price increase was needed for the long term sustainability of the dairy industry and regional communities.

“We’ve heard the outlook will continue to be extremely tough for dairy farmers right across the country,” he said.

“This is affecting milk production and farm viability. It’s clear something needs to change.”

Federal Agriculture Minister David Littleproud said he hoped the decision was the beginning of the end for Australia’s “$1 milk disaster”.

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

Robert Miller’s family has been farming in Milton, halfway between Bega and Sydney, for the last 150 years and was almost ready to shut the operation down.

“Now there is a light at the end of the tunnel for us,” he said.

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