Coles to pay $5m for sour pledge

COLES will pay $5.25 million to the nation’s struggling dairy farmers after being accused of misleading consumers when it said it would pass on its price rise on supermarket-branded milk.

The payments follow an investigation by the Australian Competition and Consumer Commission into whether Coles fully passed on to Norco Co-operative Limited dairy farmers a 10c-per-litre price rise it charged consumers.

The consumer watchdog had been investigating allegations that, in a media release, social media posts and in-store signage, Coles had indicated the full benefit of the price increase of its Coles-branded two-litre and three-litre milk, announced last March, would be passed on to droughtstricken farmers.

Coles has now committed in writing to the ACCC that it will pay an additional 7c per litre for two-litre and three-litre Coles branded fresh milk, which amounts to about $5.25 million, to Norco for milk supplied between April 1, 2019 and June 30, 2020, resolving the ACCC’s investigation.

ACCC chairman Rod Sims said the majority of the money would be paid to Norco farmers in Queensland and NSW within a week.

“We were fully prepared to take Coles to court over what we believe was an egregious breach of the Australian consumer law,” Mr Sims said.

“We believe we had a strong case to allege misleading conduct by Coles.

“Accepting this commitment means that farmers will receive additional payments from Coles, with the majority of the money to be paid to

Norco within seven days. Court action would also have taken many months, if not years, with no guarantee that any money would have been paid to farmers as a result.

“Coles allowed farmers, consumers and the Australian public to believe that its 10c-per-litre price rise would go straight into the pockets of dairy farmers, when the ACCC alleges this was not the case for Norco farmers,” Mr Sims said.

“The ACCC will be keeping a very close eye on Coles to ensure they follow through on this commitment.”