Shoppers buy milk price hike

WOOLWORTHS fresh food director Paul Harker says shoppers have supported the supermarket’s move to end $1a-litre milk, with sales steady in the wake of the price rise.

Mr Harker said the decision by Woolworths to permanently increase the price of its own-brand milk range is expected to deliver dairy farmers an extra $30 million a year.

The supermarket giant has handed over more than $10 million to dairy farmers on the back of drought relief initiatives and permanent price increases to its private-label fresh milk range.

The cash will benefit more than 450 dairy farmers.

“It’s been heartening to see our customers back our efforts to support a more sustainable dairy industry, Mr Harker said.

“Our customers can be confident the benefits of our price changes are flowing through to dairy farmers each month.”

The nation’s biggest supermarket chain introduced a drought relief milk range in Victoria, New South Wales and Queensland in September and October last year. The then temporary measure increased the price of specially marked Woolworth’s two and three-litre varieties by 10 per cent, taking a two-litre bottle to $2.20 and a three-litre bottle to $3.30.

In February, the supermarket giant stepped back from $1a-litre milk altogether, making the 10c a litre price increase permanent.

The move – enthusiastically welcomed by the dairy industry – marked a retreat from a key front in the supermarket price wars.

Rivals Coles and Aldi were eventually forced to raise their fresh milk prices as well, bringing an end to a price war which had angered dairy farmers since it was launched by Coles on Australia Day 2011.

Both Coles and Woolworths sell their one-litre house-brand milk for $1.20.

Woolworths said it had made a $2.7 million payment to its dairy farm suppliers yesterday, taking total payments to $10.1 million.

The money is distributed to farmers by the respective dairy processors in each state. The distribution is independently audited to ensure the full benefit flows through to dairy farmers, Woolworths said

Mr Harker said farmers across the nation’s dairy producing regions were telling the supermarket chain the price increase was making a meaningful difference as they continue to battle tough conditions and rising costs.

“While we’re realistic these contributions won’t solve broader structural issues, we’re pleased they’re improving farm viability and boosting confidence in the industry,” he said.

Coles said its dairy sector drought relief effort had raised $7.3 million, made up of $3.65 million in customer donations at the checkout that were matched dollar-for-dollar by the supermarket chain.

The dairy industry had long complained about $1 milk although an investigation by the Australian Competition and Consumer Commission in 2017 found cheap milk at the supermarket was not to blame for farmers pocketing low prices.