Supermarket giants pledge to raise milk prices by 10 cents a litre

Author : mamun Published: March 19, 2019

Updated

March 19, 2019 21:48:12

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Coles and Aldi have said the proceeds from the price increase will go to farmers. (ABC Rural: Brett Worthington)

Major retailers Coles and Aldi have increased the price of cheap milk in a bid to help struggling dairy farmers.

Key points:

Both Coles and Aldi will match Woolworths and charge an extra 10 cents per litre for their home brand milk
The supermarkets say the measures are temporary, to aid struggling dairy farmers
However, both retailers said industry reforms were needed to address the problems facing dairy producers

The supermarkets had been under pressure to follow competitor Woolworths, which increased the cost of its home-brand milk by 10 cents per litre last month.

Agriculture Minister David Littleproud recently called on Australian shoppers to boycott Aldi and Coles for as long as the supermarkets continued to offer cheap milk.

External Link:

Tweet from Warwick Long: Dollar milk is dead. (At least in the interim) Woolworths, Aldi and Coles will charge more tomorrow. Approximately 696 million litres of milk was sold as $1 milk last year by these three supermarkets. Even at 10 cents per litre more that will be $69.6 million more into dairy.

Coles and Aldi both issued statements on Tuesday night announcing the price of two and three-litre home brand milk at their stores would increase by 10 cents per litre from March 20.

Coles described the price increase as an interim measure, and Aldi said the price hike was a short-term solution.

Both supermarkets said the proceeds would be passed on to dairy farmers.

“This victory is a good start in the war against $1-a-litre milk,” Mr Littleproud said.

“I welcome this news and I encourage supermarkets and processors to spread this right across the dairy range.”

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Tweet from David Littleproud: On Friday Coles and Aldi promised to review their current position on Dairy pricing. Until they do you can send them a message and not shop there!

Coles chief executive Steven Cain said drought had compounded many of the difficult issues Australian dairy farmers are facing.

Announcing the price increase, Mr Cain said the retailer was “continuing to explore long-term solutions with government and industry stakeholders” to help the dairy industry.

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

Dairy farmers’ gross income

Farmer’s gross income has dropped from 54.4 cents a litre in 1991/2 to 46.3 cents a litre in 2017/18. More on this:

In a written statement, Aldi Australia spokesman Oliver Bongardt said the German retailer would work with dairy processors to support the long-term viability of the dairy industry.

“Our decision to increase fresh milk prices has been reached in recognition of the significant issues currently impacting the dairy industry and the fact that broader government-led policy reform is unlikely to occur in the short term,” Mr Bongardt said.

The price increase comes as Australian dairy farmers are expected to produce the lowest level of milk since the mid-1990s.

A growing number of dairy farmers are exiting the industry, saying it costs more to produce the milk than they are paid for it.

Drought, a downturn in crucial export markets, and high feed, water and electricity prices have made it difficult for farmers to compete since a global downturn in mid-2016.

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