Supermarkets raise cost of milk to help farmers

COLES and Aldi have increased the price of milk by 10 cents a litre to help farmers affected by the drought.

The supermarket chains were previously charging customers $1 a litre for milk. Coles says it is paying dairy processors “the highest farmgate milk prices in four years, without passing on the added expense to customers”, but notes “it is clear that many dairy farmers, particularly in northern Victoria, New South Wales and Queensland, are struggling as a result of drought”.

As of last week, Coles increased the price of 2 litres of Coles Brand milk to $2.20 and 3 litres of Coles Brand milk to $3.30 in most of its supermarkets “as an interim measure”, with the new pricing to be progressively rolled out across all stores.

Coles says the increase in cost “will go directly to the dairy farmers” who supply Coles Brand milk to its customers.

“Coles sources 100 per cent of our Coles Brand fresh milk from Australian farmers, many of whom are struggling as the impact of drought compounds ongoing challenges in the dairy industry,” Coles Group chief executive officer Steven Cain said.

“Coles supports proposals to make Australia’s dairy industry more sustainable, and we are continuing to explore long-term solutions with government and industry stakeholders.

“However, we know that many dairy farmers cannot wait for structural reform to be delivered, so we are moving to provide relief right now.”

United Dairyfarmers of Victoria (UDV) vice president John Keely acknowledged the announcement to “abandon the $1 milk price freeze that has undercut the dairy industry over the past eight years”.

“The dairy industry cannot return to $1 per litre. Even in a good year, the $1 per litre price is not viable for our high value industry,” he said.

“While acknowledging this move in the right direction, it is time to move on from the discussion on cents, and start a sensible discussion about structural supply chain issues.”