New Coles label to tap market for branded milk

Coles is preparing to introduce a new, higher-priced milk label, with profits passed directly to farmers.

Victoria produces around 5.9 billion litres of milk a year.

Coles and the Victorian Farmers Federation will next week launch their new farmers fresh milk alternative, which aims to tap the market for branded milk, directly helping farmers.

The product, due to be launched next Wednesday, is modelled on a two-year long program in South Australia which sells milk under the SADA name. It’s priced at $2.99 for a two litre bottle, with farmers collecting 20 cents for each packet sold.

The milk sells around 2.5 million packets a year, raising $250,000 for South Australian dairy farmers.

The Coles-VFF initiative comes amid a long campaign by Agriculture Minister Barnaby Joyce against $1 a litre milk.

Victoria produces around 5.9 billion litres of milk a year out of a total crop of 9 billion, of which around 550 million litres or around 8 per cent is used as so-called market milk or drinking milk.

Around half of that output, or 275 million litres, is sold in house brand packages at $1 a litre.

In South Australia the SADA milk is supplied by Parmalat, which used to have the Coles contract in the state but that is now held by Lion.

In Victoria the VFF milk will be supplied by Murray Goulburn, which supplies house brand milk to Coles under a 10 year deal.

The farmers fresh brand is meant to provide an alternative to allow consumers to buy a brand which directly benefits farmers, through a levy which boosts the retail price.

Dairy farmers in Victoria are now earnings around 37 cents a litre from house brand milk.

The VFF and Coles declined to give any details around next week’s launch.