Supermarket giant Woolworths has announced that from tomorrow, Tuesday, it will remove $1 per litre fresh milk from its stores nationwide, following the success of its drought relief milk range.
Last month the supermarket giant announced that it would continue the range on the eastern seaboard for a further six months, but today CEO Brad Banducci announced a long term nationwide plan, saying this model is the most effective way to guarantee price increases end up in the pockets of Australian dairy farmers.
Two and three litre varieties of Woolworths branded fresh milk will be priced at $2.20 and $3.30 respectively, with the full 10 cent increase to go to the 450+ farmers who supply into this milk.
The drought relief range on the eastern seaboard has secured $5.8 million for more than 285 dairy farmers since September 2018.
“We believe the long term sustainability of our dairy industry – and the regional communities they help support – is incredibly important for Australia,” Banducci said.
“In our consultation with industry bodies, including the Australian Dairy Farmers Association, its state members and NSW Dairy Connect, we’ve heard the outlook will continue to be extremely tough for dairy farmers right across the country.
“This is affecting milk production and farm viability, which is devastating for farmers and the regional communities in which they live. It’s clear something needs to change and we want to play a constructive role in making this happen.”
While Banducci admitted that this won’t solve broader structural issues he is hopeful it will inject “much needed confidence” into the sector.
Australian Dairy Farmers CEO David Inall welcomed the move by Woolworths, calling it a “game changer in the fight against discount dairy”.
“It is reassuring that Woolworths has committed to deliver the full 10 cent increase back to those farmers who supplied the milk into that product category,” Inall said.
“Removing $1 milk is not just intended to restore farmers’ financial confidence, but it will also boost confidence in regional communities and small businesses that rely on the industry. Consumers can buy fresh milk from Woolworths knowing they are supporting the Australian farmers who supplied it.”
The extra 10 cents is distributed to farmers by processors in line with the usual payment cycles and will have continued oversight and be independently audited.
“We’re acutely aware of the budgetary pressures facing many of our customers and have not taken this decision lightly,” Banducci added.
“We believe it’s the right thing to do and a key step in shoring up fresh milk production in Australia.”
Woolworths was the first Australian supermarket to launch Drought Relief Milk back in September 2018 with Coles later following suit.