Woolies milk price: Supermarket chain axes $1-a-litre milk
Grocery giant Woolworths has called time on $1-a-litre milk, announcing a permanent price rise. So how much will you pay and what will Woolies do with the extra cash? All the details here.
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Woolworths has retreated from a key front in the supermarket price wars, calling time of the sale of $1 a litre milk.
The nation’s biggest supermarket chain has moved to permanently increase the price of its two and three-litre varieties of Woolworths-branded fresh milk in a move enthusiastically welcomed by the dairy industry.
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Woolworths’ move to break ranks in the pricing of the key consumer staple is the latest sign the battle to win over shoppers is expanding beyond a heavy focus on cutting prices.
The grocer will permanently sell two litres of milk for $2.20 and three litres for $3.30 from today. It has also pledged to ensure “every cent” of the price increase ends up with dairy farmers.
Coles and Woolworths introduced a drought levy on some of their house-brand milk products last September to support dairy farmers.
Woolworths will now make the price structure of its drought-relief range — which added 10 per cent to the price of marked two and three-litre products — permanent across all of its private-label offering.
A one-litre carton of Woolworths milk will continue to be sold for $1.20 with no extra payments going to farmers.
Chief executive Brad Banducci said the price change would deliver higher milk prices to more than 450 dairy farmers who supplied the house-brand range.
“We believe the long-term sustainability of our dairy industry — and the regional communities they help support — is incredibly important for Australia,” he said today.
“While we’re realistic this won’t solve broader structural issues, we hope it will help inject much-needed confidence into the sector and the regional communities dairy farmers do so much to support.”
Mr Banducci said Woolworth’s Drought Relief Milk range had delivered farmers $5.8 million in extra payments.
Australian Dairy Farmers chief David Inall said the price rise was “a game changer in the fight against discount dairy that has long frustrated the industry”.
“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,” Mr Inall said.
Coles is widely viewed to have launched the so-called supermarket price wars by introducing $1-a-litre milk on Australia Day in 2011.
Both Coles and Woolworths have increased the price of cooked chooks — another key product line — over the past year.
The dairy industry had long complained about $1-a-litre 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.
Federal Agriculture Minister David Littleproud said he hoped the price reset by Woolworths marked the beginning of the end of the “$1 milk disaster”.
“Supermarkets can’t pretend selling milk cheap doesn’t hurt farmers and they’ve got to be called out on this rubbish,” Mr Littleproud said.
Woolworths shares closed 0.7 per cent, or 21c, higher today at $30.24.
Originally published as Woolies milk price: Supermarket chain axes $1-a-litre milk
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