Coles and Aldi cave on milk price increase

Coles milkColes and Aldi have finally buckled under the pressure to follow Woolworths decision to increase pricing of own milk brands from $1 per litre.

Starting today Wednesday, both supermarkets have increased the price of milk by 10 cents per litre, bringing the price of the 2 litre cartons to A$2.20 and the 3 litre to A$3.30.

Both supermarkets said they will pass on the proceeds directly to dairy farmers.

“Coles sources 100 per cent of our Coles Brand fresh milk from Australian farmers, many of whom are struggling as the impact of drought compounds ongoing challenges in the dairy industry,” Coles Group CEO Steven Cain said.

“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 that many dairy farmers cannot wait for structural reform to be delivered so we are moving to provide relief right now.”

The supermarket giant said it’s currently paying dairy processors the “highest farm gate milk prices in four years, without passing on the added expense to customers.” But the drought has led to dairy farmers still struggling in northern Victoria, New South Wales and Queensland.

Aldi said the move represents a “short-term solution to an industry wide problem” that requires coordinated Federal Government-led structural reform.

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

 

Aldi said the decision comes after “constructive discussions” with milk processors who are worked with the supermarket to find a way to pass on the additional proceeds to the dairy farmers.

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