Minister gives Woolies a spray

Matt CoughlanCountryman
Federal Agriculture Minister David Littleproud.
Camera IconFederal Agriculture Minister David Littleproud. Credit: TheWest

Federal Agriculture Minister David Littleproud has renewed savage attacks on big supermarkets over milk prices, accusing Woolworths of token gimmicks instead of helping farmers.

Woolworths this week announced an extension of a 10¢ levy on its own-brand two and three-litre milk, which it says will result in $30 million flowing to producers.

The 10¢ a litre levy has contributed about $50m to dairy farmers since Woolworths introduced the initiative in 2018.

The move to extend the support will provide certainty to more than 450 dairy farmers supplying milk used in the production of Woolworths-branded milk as the Federal Government’s mandatory code of conduct comes into full effect and drives change in the industry.

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But Mr Littleproud said the grocery giant was creating a corporate feel-good fund to promote its own brand.

“It is utterly disrespectful of Woolworths to try to capitalise on World Milk Day with this pitiful offering, duping consumers into thinking the dairy farmers are getting genuine help from the supermarket,” he said.

“The supermarkets aren’t listening to me or dairy farmers when we are clearly saying they need to restore the value they stripped from the dairy industry with $1-a-litre milk.”

Woolworths fresh food director Paul Harker said the levy would give millions of dollars to farmers over the next year beyond the farm-gate price paid by processors.

“While conditions have improved and farm-gate prices have gone up since we started the levy in 2018, we’re extending payments to provide certainty while dairy farmers and processors find their feet under the new mandatory code,” he said.

“This is set to return tens of millions to dairy farmers over the next 12 months above and beyond the farm-gate price they’re paid by their processors.

“To build on our existing support, we’re also working to establish a dairy fund to offer financial grants for dairy farmers to invest in new infrastructure or technology to improve profitability.”

Industry lobby group Australian Dairy Farmers wants to increase the retail price of milk and pass the increase back to dairy farmers via processors.

Mr Littleproud said farmers wanted a fair price for milk instead of relying on charity or grants, and Woolworths should stop hiding behind fear of moving first and stump up.

“Stop holding back the extra $90m in value from the Australian dairy supply chain and claiming to be dairy’s saviour with $5m of grants that farmers need to grovel for,” he said.

“We just need fair prices for dairy farmers, not tokenism.”

The Federal Government’s mandatory code of conduct was one of the Australian Competition and Consumer Commission’s key recommendations from its inquiry into the dairy industry in 2018.

It has been introduced to address what the ACCC determined was an imbalance in bargaining power.

Processors must publish their standard-form milk supply agreements to cover all the circumstances in which they intend to buy milk in the coming financial year.

Woolworths will also establish a $5 million fund to provide infrastructure and technology grants to dairy farmers over the next three years.

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