Woolworths lifts $1-a-litre milk price

WOOLWORTHS will wipe $1-a-litre milk from its stores, nationwide, from tomorrow.

Woolworths permanently lifts the milk price to above $1-a-litre.

WOOLWORTHS will wipe $1-a-litre milk from its stores, nationwide, from tomorrow.

Ten cents will be added to the price of all Woolworths milk, which will be passed straight onto farmers.

The move will see the supermarket sell two and three litre varieties of Woolworths branded fresh milk for $2.20 and $3.30 respectively.

Up until now Woolworths has only applied a 10-cent drought levy on its 3-litre milk Drought Relief Milk range, with customers given the choice to buy levied or unlevied 2-litre milk containers.

In NSW and Queensland Parmalat will be required to pass the additional 10 cents straight back to farmers, while in Victoria it is expected Fonterra will spread the additional revenue across all suppliers.

Woolworths predicts that as the price change goes national, it will deliver higher milk prices to more than 450 Australian dairy farmers supplying into Woolworths branded fresh milk.

Woolworths Group CEO Brad Banducci said: “We believe the long term sustainability of our dairy industry — and the regional communities they help support — is incredibly important for Australia.

“In our consultation with industry bodies, including the Australian Dairy Farmers Association, its state members and NSW Dairy Connect, we’ve heard the outlook will continue to be extremely tough for dairy farmers right across the country.

“This is affecting milk production and farm viability, which is devastating for farmers and the regional communities in which they live. It’s clear something needs to change and we want to play a constructive role in making this happen.

“The Drought Relief Milk payment model has worked on the eastern seaboard and is the most effective way to guarantee price increases end up in the pockets of Australian dairy farmers.

“While we’re realistic this won’t solve broader structural issues, we hope it will help inject much needed confidence into the sector and the regional communities dairy farmers do so much to support.”

Dairy Connect president Graham Forbes welcomed Woolworth’s decision and said it was time for Coles and Aldi to step up to the mark and rid the dairy industry of $1-a-litre milk.

“We’ve already seen the drought relief milk deliver up to $10,000 a month to some of our farmers,” Mr Forbes said.

“We’ve been working with Woolworths for a while on this and it’s good to see ADF (Australian Dairy Farmers) come up on this.”

ADF chief executive CEO David Inall said: “There is no doubt that this is a game changer in the fight against discount dairy that has long frustrated the industry.

“It is reassuring that Woolworths has committed to deliver the full 10 cent increase back to those farmers who supplied the milk into that product category.

“Removing $1 milk is not just intended to restore farmers’ financial confidence, but it will also boost confidence in regional communities and small businesses that rely on the industry.

“Consumers can buy fresh milk from Woolworths knowing they are supporting the Australian farmers who supplied it.”

Mr Banducci added: “We’re acutely aware of the budgetary pressures facing many of our customers and have not taken this decision lightly. We believe it’s the right thing to do and a key step in shoring up fresh milk production in Australia. We’ll continue to work very hard to offer great value to our customers across their total shop.”

Woolworths was the first Australian supermarket to launch Drought Relief Milk back in September 2018.

Under the model, the extra 10 cents customers pay on each litre is distributed in full to dairy farmers by processors in line with the usual payment cycles.

The distribution of the additional funds will have continued oversight and be independently audited.

Woolworths will continue to consult and engage with dairy industry bodies on longer term reform and payment mechanisms.

The Weekly Times is awaiting comment from Coles, who started the ‘down down’ $1-a-litre milk discounting war, whether it would follow Woolworths’ lead.