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Global Ag View: Australian retailers push up milk prices in drought struggle

Australian supermarkets have announced they will increase milk prices to help Australian farmers struggling after extreme weather.

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Global Ag View: Australian retailers push up milk prices in drought struggle

Supermarket giants Coles and Aldi have raised the price of their two-and three-litre bottles by 10 cents (5p), with the money passed back to farmers. But both emphasised this was a temporary measure and structural reform of the whole industry was needed.

 

It comes after Australian Minister for Agriculture and Water Resources David Littleproud called on people to boycott the supermarkets unless they raised prices.

 

Mr Littleproud said the announcements meant they were ‘breaking the back’ of the $1 (54p) litre milk model.

 

“It is time farmers received fair reward for their effort,” he said.

 

Mr Littleproud also announced a dairy code of conduct outlawing exclusive contracts, retrospective price cuts and the deduction of loyalty payments so farmers could switch processor more easily.

 

He added he was pleased by the announcement, but would ‘not stop fighting for a fairer price for farmers right across the dairy range’.

 

Coles said it would work with the processors to ensure money would go back to the farmgate. It said it was already paying the highest milk price for four years, but many dairy farmers were struggling as a result of drought.


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Coles Group chief executive Steven Cain said they sourced 100 per cent of their own brand fresh milk from Australian farmers.

 

“Coles supports proposals to make Australia’s dairy industry more sustainable and we are continuing to explore long-term solutions with Government and industry stakeholders.

 

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

 

Oliver Bongardt, Aldi Australia managing director of buying, added: “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.”

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