Woolworths will stop selling dollar-a-litre milk this week with the remaining two- and three-litre bottles of home-brand milk going up in price in a move the supermarket says will benefit Australian dairy farmers.
Prices of the two- and three-litre bottles will increase from $2.20 and $3.30 respectively with Woolworths saying every cent of the increase will end up with dairy farmers.
As the price changes goes into effect nationally, Woolworths says it will deliver higher milk prices to more than 450 Australian dairy farmers supplying into Woolworths branded fresh milk as they struggle with drought conditions and the increasing cost of feed and water.
This price change follows on from the retailer's Drought Relief Milk range of milk which included a 10 per cent farmers' levy launched in September 2018. This has delivered $5.8 million in relief to more than 285 dairy farmers since its inception, according to Woolworths.
“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,” 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.”
It is expected this move by Woolworths will place pressure on its retail rivals Coles and Aldi to also make milk pricing changes.
“Coles and Aldi continue to sell milk at $1,” Minister for Agriculture David Littleproud said. “This drives down prices to farmers. Supermarkets can’t pretend selling milk cheap doesn’t hurt farmers and they’ve got to be called out on this rubbish.”
“All supermarkets should pay a fair price for all dairy – this includes cheese and yoghurt, not just fresh milk, which is a small fraction of the market.”
The federal government is working on a mandatory code of conduct in the dairy supply chain that looks at the effects of bargaining power between milk producers and retailers.
