Woolworths breaks $1 per Litre milk deadlock

Woolworths today decided to dump $1 per Litre milk, with an additional 10c per Litre to go back to farmers.

PRICE INCREASE: Woolworths will charge an extra 10c per Litre for branded milk.

PRICE INCREASE: Woolworths will charge an extra 10c per Litre for branded milk.

Though welcoming the measure, 4 Real Milk’s Farmer Greg Dennis said the industry was still a long way from solving the problems it faced.

“It’s a positive,” he said.

“Hopefully it is the start of the end but it is not a solution.”

Mr Dennis said consumers purchasing milk at $1.10 was not going to support the farmers who actually required at least an extra 30c per litre just to stay in business.

“Buying brand name milk at closer to $2 per litre would support the farmer,” he said.

“Milk sold for $1 in 1992, so if you account for inflation, $1.10 per litre is about 1995 retail prices and it is not enough.”

Mr Dennis said it was almost embarrassing that Woolworths had taken action before the government.

“They have done this on the back of public pressure,” he said.

“It is almost an admission of guilt by Woolworths that they engaged in the price war for too long.

“If you read between the lines, they have acknowledged that this is not enough and there may be more price rises in the future.”

He said it was frustrating to see Coles was still yet to act and he encouraged consumers to shop at Woolworths.

“Coles have not wanted to make any changes or address this issue,” he said.

“There has been daylight between our dealings with Coles and Woolworths.

“Woolworths appear to be starting to apply a social conscience but I’m not seeing that from Coles.”

Federal Member for Wright, Scott Buchholz has welcomed Woolworths decision to dump $1 per Litre milk.

Mr Buchholz said $1 per Litre milk had undermined the long term sustainability of our dairy industry and commercial viability of local farms for far too long.

“Since the introduction of $1 per Litre milk in 2011 the number of dairy farmers Queensland has contracted.

“In 2000 there were 1,545 dairy farms in Queensland, now down to less than 393 today,” Mr Buchholz said.

“This is a direct result of $1/ Litre milk and the processors using their bargaining power to drive down what they in turn pay farmers for milk at the farm gate,

“Woolworths have today taken a big first step this morning by moving on from $1 per Litre milk in support of our dairy farmers and I thank Woolworths for this.

“It is now time for Coles and Aldi to do the same and for the processors to be honest and transparent about their dealings with dairy farmers – my dairy farmers can no longer afford to supply milk at prices below the cost of production.

“I encourage all residents to buy their milk from the retailers, like Woolworths who support our local dairy farmers, or better yet branded local milk.

“I would also like to commend the Queensland Dairy Organisation for their advocacy and work with the Federal Government to support the industry in Queensland.”

Mr Buchholz said while the Government had no mechanism to control milk prices, the Liberal National Government was working to put an environment in place to support the industry through a mandatory code of conduct for the industry.

“A mandatory code will help to address the current power imbalance between dairy farmers and processors, which was a key finding of the recent ACCC dairy inquiry,” he said.

“The final code is expected to be completed and approved by the Parliament in the first quarter of 2019.”

The Queensland Dairy Farmer’s Organisation was delighted to see the leadership shown by Woolworths.

President Brian Tessman said the decision to charge an additional 10c per Litre for Woolworths branded milk signified understanding, empathy and a social conscience that was so dearly lacking in other major companies.

He said Woolworths had a track record of ensuring every cent collected went back to local farmers and customers could be confident the money would go directly to those in need.

“We saw that the Australian shopper really wanted to help our struggling farmers and wanted to support them to get a fair deal,” he said.

“Woolworths have acknowledged that and done the right thing.”