Aldi, Coles, Woolworths lift milk prices as farmers demand $2 per litre
Major supermarkets have lifted generic milk prices by 7 per cent, but dairy farmers say the increase needs to be reflected in springtime step-ups.
Generic milk prices have quietly risen at Australia’s largest supermarkets, with farmers encouraging retailers to pass on the gains to the farmgate.
Aldi, Coles and Woolworths all lifted the price of generic milk from $1.55 to $1.65 a litre earlier this month, with the two-litre price rising from $3.00 to $3.20 and three-litre bottles from $4.35 to $4.65.
The retail price rises hover between 6 and 7 per cent across the three sizes, leading the Australian Dairy Farmers group to call for the supermarket checkout lift to be reflected in springtime step-ups.
ADF president Ben Bennett said while the small increase was welcome, the price needed to push past $2 a litre.
“The whole dairy cabinet is being weighed down by the supermarkets,” the southwest Victorian farmer said.
“Generic milk is the most obvious example, but look at generic block cheese, look at butter.
“In New Zealand, consumers and MPs are talking about a public inquiry into the cost of butter but in Australia, the price is static.
“Large parts of Australia’s dairy regions are in drought, some are still recovering from floods and we’ve still got a price below $2 a litre? Get real.
“If the retail price has risen between 6 to 7 per cent, then we need to have step ups of 6 to 7 per cent to reflect that at the farmgate.”
Coles and Woolworths created consternation within the Australian dairy sector back in 2011, when both supermarkets dropped the price of generic milk to $1 a litre.
Prices have been rising slightly since 2019, although all three supermarkets cut prices by 10 cents a litre last year.
NSW dairy farmer Tim Bale said artificially low generic milk prices stifled sales of branded milk and did not reflect the true cost of production.
“Loss leader prices place pressure on the processor, who then offset that pressure onto the farmer. A minimum of $2 a litre is far more reflective of the cost of producing milk, freight and processing,” Mr Bale said.
“I supply Farmers Own (an exclusive Woolworths brand) and that pays a little more but there’s certainly room for improvement and we’ve been attempting discussions with Woolworths on that issue.
“After droughts and floods covering most of Australia’s dairy regions, there’s a growing need to have retail prices that reflect the true cost of production if we want a sustainable dairy industry. Because current pricing is not sustainable.”
South Australian Dairyfarmers Association president Robert Brokenshire said the price of generic milk should be at least $2 a litre, with an aim of $2.50 a litre.
“The supermarkets claim that it doesn’t affect farmgate prices — that’s just not true. It may not affect farmgate prices for some select farmers but these low prices are weighing down the profitability of the entire industry.”
A Woolworths spokesman said: “We understand that affordable fresh milk is important to Australian families. So, we’ve been maintaining low fresh milk prices for some time now.
“We source our own brand milk from processors, who have increased the prices for the products we source from them this year. As we’re paying our processors more, we’ve adjusted the prices of our Woolworths brand milk to reflect these increased costs.”
Aldi and Coles have all been contacted by The Weekly Times for comment.
