Coles, Woolworths to raise price of generic milk

Coles and Woolworths have lifted prices in the dairy cabinet after a push from Australia’s dairy farmers for a price tag rethink.

Woolworths has joined Coles in lifting the price of generic brand milk – with mirror-image results.

The price of a one-litre carton of Woolworths brand milk will rise to $1.60, while a two-litre bottle will lift to $3.10.

A Woolworths spokeswoman said the price rise reflected “higher wholesale costs across the entire industry”.

“The farmgate prices paid to dairy farmers have risen significantly this season, and as a result we’re paying our own brand suppliers more for milk,” the spokeswoman said.

“Across the dairy cabinet, brands have already increased their retail prices to reflect higher wholesale costs across the entire industry.

“We’ll be adjusting the price of our own Woolworths brand milk in the coming days to reflect these higher costs as well.

“We remain focused on delivering value for customers across their shop and have frozen the price of 200 essential household products until the end of the year to provide certainty for our customers.”

While two of the big three now have generic milk at $1.60 a litre, Aldi is yet to outline how much it will raise its prices.

A spokesman for Aldi said the supermarket was “actively reviewing the retail price of our milk range.

“(This is) with the view to ensure our pricing reflects the additional costs that are impacting dairy farmers,” the spokesman said.

“This is likely to result in a retail increase that will be passed along to our dairy farmer partners. Ultimately, we always want to deliver the best value for our customers while maintaining fair pricing with our supplier partners.”

EARLIER TODAY

Coles are lifting the price of generic brand milk across its supermarkets nationwide, reflecting inflation elsewhere with grocery prices.

The price of a one-litre carton of Coles brand milk will rise from $1.35 to $1.60, while a two-litre bottle will lift from $2.60 to $3.10.

Three-litre bottles of generic milk have also risen in price, from $3.90 to $4.50 – effectively $1.50 a litre for the most price-conscious shoppers.

Coles chief commercial officer Leah Weckert said raising prices was “never something we do lightly”.

“However, the increased supply chain costs we are seeing, including higher payments to dairy farmers and processors, have necessitated these increases on Coles brand milk products,” Ms Weckert said.

“The feedback we’ve received from farmers and processors following the recent increases in farmgate and wholesale prices has been very positive, and we hope customers will help us continue to support them by purchasing their great quality Australian milk.”

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.

Coles has increased the price of milk, in a move being hailed by dairy farmers and processors.

The low prices remained in place for seven years, with the price hovering near the $1.30 a litre mark for the past 12 to 18 months.

The move has been hailed by dairy farmers and processors, after a decade-long campaign to bust $1 a litre generic milk pricing.

Norco chief executive Michael Hampson welcomed the decision.

His co-operative supplies milk to Coles in Northern NSW and Southern Queensland, and has been hard hit by recent floods.

“Through our long-term partnership with Coles, we have been able to support our 300 farmer members with a record farmgate milk price increase,” he said.

“(That’s) across the total 200 million litres that our members supply to our 100 per cent farmer owned co-operative.

“This is especially important as farmers face pressures from rising costs of production, with many still recovering from the devastating impacts of recent unprecedented weather events.”

Aldi management have been contacted by The Weekly Times to determine whether they too would increase prices on their generic lines this week.

Coles last month signed updated contracts with 100 farms to supply milk directly for its in-house brand.

Coles management said the updated contracts included an increase to the farmgate price paid by the supermarket this financial year, even for farmers with multi-year contracts already in place.

Southwest Victorian farmers John and Anne Boyd praised Coles for their responsiveness to input price pressures.

“We appreciate the stability a three-year direct supply agreement gives us, to enable constant investment to produce the best quality milk we can,” Mr Boyd said.

“It is also Coles’ responsiveness and dependability that has impressed us. This year they significantly increased prices paid to respond to our current cost pressures when they didn’t have to, as we already had an agreement in place.”