The federal agriculture minister has savaged Coles and Aldi for retaining their cut-price milk lines and urged customers to boycott them.
David Littleproud has accused Coles of “pretending” to be a decent corporate citizen and Aldi of “hiding under the stairs” after they failed to follow Woolworths and stop selling milk at $1 a litre.
Dairy farmers struggling with drought need an end to Australia’s “$1 milk disaster”, he said, a price war that began eight years ago and has been blamed for sending some farmers to the wall.
“Publicity stunts like (Coles) asking shoppers to donate at the counter to help struggling farmers are just a smokescreen to hide the fact they pay bugger all for milk,” Littleproud said.
“The farmers wouldn’t need donations from the public if Coles and Aldi paid fair prices.”
On Feb. 19, Coles said it would not axe its $1-a-litre Coles-branded milk, citing cost of living pressures on customers.
It said it would look for other ways to help farmers, including collecting customer donations and matching them dollar for dollar from next week.
It also pointed out it had committed $16 million (US$11.4 million) over the past six months to support diary farmers, and promised to continue liaising with the industry and the Australian Competition and Consumer Commission (ACCC).
But the minister said Coles had been saying that since August.
“So now it’s time to put up or shut up. Act like a decent corporate citizen instead of just pretending to,” Littleproud said.
On Tuesday, Aldi said low prices were a core promise to its customers and gave no indication its pricing policy would change.
It said it sourced its milk from processors, not farmers, and it expected processors to pay primary producers a sustainable price.
Littleproud said Australians should send a message with their wallets, and switch their business away from Coles and Aldi.
Dairy Connect, an advocacy group for dairy industry players, echoed that call, saying consumers can help force Coles and Aldi to change their ways.
“Shareholders ought to be ashamed at the way Coles has conducted itself,” Graham Forbes, a NSW dairy farmer and Dairy Connect farmers’ group president, said.
“And Aldi are very hard-nosed. If they don’t change their mind they'll be dealing with processors with no milk.”
Woolworths stopped selling its home-brand milk at $1 a litre on Tuesday, upping the price by 10 cents with the extra money to go back to farmers.
Woolworths admits that some customers may not like paying more for the same product but believes many others will support the increase because it is the “right thing to do.”
A Major Victory
The ADF celebrated Woolworth’s announcement as a “major victory in the fight against discount dairy products,” saying it had long complained about the damaging effect of cheap milk on the dairy industry since the year 2011.“We understand that the decision to raise the price of a staple household food item was not easy to make but it was unquestionably the right one,” ADF Media and Communications Manager Ashley Mackinnon said in a public statement. “Woolworths should be applauded for having the courage to phase out its $1 milk line, and it is now time for other retailers to immediately do the same. No ifs, no buts.”
“There is no doubt that this is a game changer in the fight against discount dairy that has long frustrated the industry,” ADF CEO David Inall said. “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.
Feedback Sought on Code
Meanwhile, the United Dairyfarmers of Victoria (UDV) is inviting dairy farmers to help the Australian Department of Agriculture and Water Resources create a mandatory code of conduct for the industry. Littleproud recently revealed details of stakeholder consultations to help the department develop the code of conduct.“It’s crucial we address the power imbalance between dairy farmers and processors,” Jenkins said.
