Aldi joins Coles and Woolworths in cutting generic milk price

Aldi has joined Woolworths and Coles in cutting the price of its generic milk — with farmers concerned over the farmgate.

Aldi has joined Woolworths and Coles in cutting the price of its generic milk, making it the first dairy fridge cabinet downgrade in more than a decade.

The discount retailer has matched its rivals on price of one litre generic milk, lowering it from $1.60 to $1.55, while two-litre bottles have been discounted from $3.10 to $3.00 and three-litre bottles from $4.50 to $4.35.

It is the first time since January 2011, when Australia’s big three supermarkets slashed the price of milk from $1.60 to $1 a litre.

NSW dairy farmer Graham Forbes has long advocated for generic milk to be priced at $2 a litre. He said the cut would hold down a potential farmgate step-up at a time when many farmers were under financial strain.

“A 5c cut may not sound much but for a farm like ours, if it flows through to the farmgate, that’s a $350,000 per annum cut,” Mr Forbes said.

“I’ve got my price locked in, so this isn’t about my farm, but it’s bad news for the wider industry. If you’re hanging out for a spring step-up, this is another factor weighing down farmgate prices.”

In March 2022, Mr Forbes called for $2 a litre for generic milk and more than two years on, he said inflation was galloping everywhere else aside from the dairy fridge.

“At the time I said $2 a litre was still cheap and as time goes on with inflation, that’s more and more the case,” he said.

“The processors need to stand up and be counted. I said as much during the Senate inquiry into supermarket behaviour. Where are the processors?”

If the October 2010 price of $1.60 a litre for milk had risen with natural inflation, according to the Reserve Bank calculator, the price tag per litre would now sit at $2.25.

United Dairyfarmers of Victoria president Bernie Free said the $1.55 a litre downgrade placed deflationary pressure on branded milk rivals.

“It’s a farmgate flattener. At the very same time the ACCC are chasing the big supermarkets, they turn around and do this to the dairy industry,” Mr Free said.

“A more sustainable price than $1.55 or $1.60 would flow through the industry and back to the farmgate. I’m sure most shoppers wouldn’t be worried about paying $2 a litre.”

An Aldi spokeswoman said: “We know that the price of essential goods has never been more important to Australians, so we remain absolutely committed to delivering the best value for our customers while also supporting our supplier partners by maintaining fair pricing. We remain focused on reviewing pricing for the whole dairy category on an ongoing basis.”