Coles joins Aldi, Woolworths in raising price of milk

Coles has finally now joined Aldi and Woolworths in raising the price of its milk, as its rivals stressed the new hike isn’t profit-driven. SEE WHAT YOU’LL PAY

Coles has finally bowed to pressure and increased the price of its milk after Woolworths and Aldi announced price changes.

But the supermarkets haved stressed they aren’t pocketing extra profits.

News surfaced recently that Aldi and Woolworths would increase the price of their homebrand milk labels by almost 10 cents, begging the question if profits would be passed on to struggling dairy farmers.

Both supermarkets have explained the nationwide price hike — which brings a one-litre bottle of milk to $1.29 - hasn’t been driven by them, and have pointed to market pressures.

Woolworths and Aldi have increased the price of the homebrand milk varieties by 10 cents. Picture: AAP

Coles launches into homewares to target rival Kmart

The baby formula bandits plundering Chadstone

Aussies are loving this Coles burger

Domino’s new menu shake-up: Beef that’s not really beef

Today, Coles confirmed in a statement that it too was altering its prices due to “market conditions”.

“Coles works closely with the dairy processors who supply Coles Brand milk,” a spokesperson said.

“Following a review of market conditions and rising cost pressures across the industry, we have taken the decision to increase the retail price of Coles Brand milk.”

From Saturday, Coles will begin moving the price of Coles Brand milk sold in Coles supermarkets and through Coles Online to $1.29 for one litre of plain white milk, $2.39 for two litres and $3.59 for three litres.

Price warfare originally saw the retail giants drop the price of their private label milk to just $1 a litre. Woolworths then lead the charge in February when it added a 10 cent levy to its own two and three-litre milk varieties. This was designed to provide relief to farmers amid stagnant farmgate prices — the money farmers receive from processors for the milk they produce.

Woolworths told News Corp Australia today the 10 cent levy continues to flow through to more than 450 dairy farmers, and explained the most recent price increase was due to steep rise in farmgate prices across the past several months.

“Since February we have seen farmgate prices increase significantly and they’re forecast to continue rising throughout the year,” a Woolworths spokesperson said.

“As a result of these farmgate price movements, we have been paying our suppliers even more for milk and other dairy products across the category over recent months.

“Due to these ongoing whole-of-market cost pressures, we have reviewed and adjusted the price of Woolworths Milk.”

Coles is being pressured to increase their private-label milk prices. Picture: Supplied

An Aldi spokesperson echoed the comments from Woolworths, telling News Corp the price increase was necessary to help build a sustainable Australian dairy industry.

“We have recently increased the retail price of our entire fresh milk range. These price rises are the direct result of the recent increase in the farm gate milk prices agreed between our milk suppliers and the dairy farmers,” an Aldi spokesperson said.

“We will continue to maintain the collection and distribution of 10 cents per litre implemented earlier this year and ensure that the proceeds are passed onto dairy farmers in full.”

The spokesperson added the new prices had been in effect since Wednesday, July 24.

Earlier, NSW Minister for Agriculture Adam Marshall welcomed the move and called on Coles to follow the same price increase, and pass the proceeds onto farmers.

“The ball is now squarely in Coles’ court. It’s time for them to step up and deliver a 10-cent per-litre pay boost to our dairy farmers,” Mr Marshall said.

“Our hard-working dairy farmers in NSW deserve a better deal and that’s why I’ve welcomed the recent announcement by Aldi and Woolworths to increase the price of milk.

“Coles has a real opportunity here to play ball and deliver our dairy farmers a fairer price.”

NSW Agriculture Minister Adam Marshall welcomed the move by Aldi and Woolworths and called on Coles to follow suit. Picture: Supplied

CEO of advocacy group Australian Dairy Farmers, David Inall told News Corp: “These price rises from Woolworths and ALDI show that after eight long years, the major retailers are recognising that dairy has a value. It means they are recognising the price of milk can rise just like it does with meat, vegetables, or any other commodity.”

In Rabobank’s latest Global Dairy Quarterly report, senior dairy analyst Michael Harvey said competition for milk among dairy companies was driving “record-high opening and forecast closing milk prices in 2019/20”.

However, he said there would be challenges in rebuilding the milk supply.

“Autumn was dry for many dairying regions, leading to ongoing feed shortages. Also, many dairy farm operators will need time to rebuild herds. With a return to profitability as milk prices improve, an immediate focus will be on repairs and maintenance ahead of major expansion projects,” Mr Harvey said.

NEW MILK PRICES

COLES

- Coles 1L plain white milk - WAS $1.20 NOW: $1.29

- Coles 2L plain white milk - WAS: $2.20 NOW: $2.39

- Coles 3L plain white milk - WAS $3.30 NOW: $3.59

WOOLWORTHS

- One-litre Woolworths branded fresh milk - WAS: $1.20 NOW: $1.29

- Two-litre Woolworths branded fresh milk - WAS: $2.30 NOW: $2.39

- Three-litre Woolworths branded fresh milk - WAS: $3.50 NOW: $3.59

ALDI

- One-litre Aldi branded full cream milk - WAS: $1.20 NOW: $1.29

- Two-litre Aldi branded full cream milk - WAS: $2.30 NOW: $2.39

- Three-litre Aldi branded full cream milk - WAS: $3.50 NOW: $3.59

Originally published as Coles joins Aldi, Woolworths in raising price of milk