‘Uncaring’ Coles told to end $1-a-litre milk

The federal government has called on supermarkets to stop selling milk for $1 a litre for the sake of the dairy industry.

Agriculture Minister David Littleproud in Brisbane. Picture: AAP

The federal government has called on supermarkets to stop selling milk for $1 a litre in a bid to help secure the future of the dairy industry.

Agriculture Minister David Littleproud slammed Coles for its allegedly uncaring attitude ­towards dairy farmers suffering in the drought, branding its limited 10c-a-litre drought milk levy on its three-litre milk only, “lazy, half-baked and uncaring”.

Mr Littleproud said the big ­supermarkets had made billions on the backs of farmers over the past few years, but appeared unwilling to take any “social responsibility” for their long-term viability.

He blasted Coles for handing its milk drought levy announced in September to the National Farmers Federation to distribute back to dairy farmers paying ­higher hay and water prices, ­without realising it was impossible for the farm organisation to do that.

Rival Woolworths has instead introduced its own “drought ­relief” brand of $1.10-a-litre milk, with the extra margin passed back to the dairy farmers who supply Woolworths through its contracted processors Fonterra and Parmalat.

More than 200 dairy farmers in Queensland and NSW started receiving their monthly Woolworths drought payments from Parmalat yesterday, with the payments based on the volume of milk each farmer supplies.

Coles has asked auditors PricewaterhouseCoopers to devise a system to pay dairy farmers a share of the extra retail drought milk levy on application, rather than refunding the levy through its homebrand processors, Saputo Murray Goulburn and Norco.

Mr Littleproud was told no Coles milk payments would be distributed until January at the earliest.

“I’m standing up and calling out Coles; I say “bully to you, what good is a record profit if in a few years’ time you have no dairy ­industry and no milk to sell?”

Total Australian milk production is plummeting in the drought to below nine billion litres a year, as farmers sell cows and 25 per cent vow to quit the ­industry.

“The Australian consumer has the power, they can make change with their wallets and stop buying $1 milk, but leadership from the supermarkets is required here too if they want to have a sustainable dairy industry that puts more money back into farmers’ pockets and secures their own future as well,’’ Mr Littleproud said.

He denied he was being populist in criticising Coles so strongly, and said that after sitting at the kitchen ­tables of desperate dairy farmers, it was simply “the right thing to do”.

“Their cost of production has gone through the roof, milk is cheaper than water, and they are just price takers because of their imbalance of power with the big processors and retailers.”

Coles said yesterday it had ­already committed more than $12 million to assist drought-affected farmers across Australia with a guarantee the extra 30c collected on its three-litre milk sales would be returned to producers battling higher costs during the drought.

Coles also warned that, based on Dairy Australia figures, a 10c per litre levy on all fresh milk would cost consumers $250 million a year on their grocery bills.