Woolies to stop selling cheap milk

WOOLWORTHS will stop selling $1 a litre milk, locking in a permanent price rise from tomorrow.

The supermarket giant today announced that from tomorrow it will permanently sell its two and three litre varieties of Woolworths branded fresh milk for $2.20 and $3.30 respectively.

It has also pledged to ensure “every cent” of the price increase ends up with dairy farmers.

The move follows Woolworths and Coles introducing a drought levy on some of their private label milk ranges in September last year to support dairy farmers.

Woolworths will now make permanent its temporary drought relief price structure, which added 10 per cent to the price of its two and three litre products. The price shift is the latest sign that fierce price competition between the two supermarket giants, which gave customers $1 litre of milk and $8 cooked chooks, is easing as both look to defend prof- it margins for shareholders.

Both supermarket chains have hiked the price of cooked chooks over the past year.

Woolworths chief Brad Banducci said the price change will deliver higher milk prices to more than 450 dairy farmers who supply the supermarket’s private label offer.

“We believe the long-term sustainability of our dairy industry — and the regional communities they help support — is incredibly important for Australia,” Mr Banducci said. “The drought relief milk payment model has worked on the eastern seaboard and is the most effective way to guarantee price increases end up in the pockets of Australian dairy farmers.

“While we’re realistic this won’t solve broader structural issues, we hope it will help inject much-needed confidence into the sector and the regional communities dairy farmers do so much to support.”

Australian Dairy Farmers chief David Inall said the price rise was “a game changer in the fight against discount dairy that has long frustrated the industry”.