Woolworths has bowed to dairy farmer pressure and rising consumer concern about the drought, vowing to lift the price of house brand milk from $1 to 1.10 a litre nationwide, from tomorrow.
The supermarket group will now sell two and three litre varieties of Woolworths branded fresh milk for $2.20 and $3.30 respectively.
It has promised every cent of the increase will end up with Australian dairy farmers.
Agriculture Minister David Littleproud welcomed newsbut said there was still much more to be done.
“Whilst I wish Woolworths was taking a much bigger step, they’re miles head of their competitors and its sad it has taken National Party pressure to get to this point,” he said.
“Coles and Aldi continue to sell milk at $1. This drives down prices to farmers.”
We’ve heard the outlook will continue to be extremely tough for dairy farmers right across the country
- Brad Banducci, Woolworths
Last year Woolworths introduced a special Drought Relief Milk range selling for $1.10/litre on the eastern seaboard, which was available in addition to its private label range.
Strong consumer support for the drought levy range has generated about $5.8 million in relief for more than 285 dairy farmers since September.
The drought milk range will now be disbanded, but as the price change goes national across the Woolworths house brand range, it will deliver higher milk returns to about 450 Australian dairy farmers supplying into Woolworths branded fresh milk.
Woolworths group chief executive officer, Brad Banducci said the retailer felt the long term sustainability of the dairy industry – and the regional communities they helped support – was “incredibly important for Australia”.
“In our consultation with industry bodies, including the Australian Dairy Farmers, 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,” he said.
“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.”
Peak milk producer body, Australian Dairy Farmers, has described Woolies’ move as “a major victory in the fight against discount dairy products”.
CEO David Inall, who joined Mr Banducci for the price change announcement, said ADF and Woolworths had engaged in “constructive discussions” in recent months around the damage wrought on the dairy industry by $1 milk and other discount dairy products.
“We understand the decision to raise the price of a staple household food item was not easy to make, but it was unquestionably the right one,” he said.
“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.
“The dairy industry has suffered from the debilitating effects of $1 milk for eight years, since Australia Day 2011.”