Woolworths has responded to calls from the dairy industry by announcing it will increase the price of its milk by 10 cents a litre as part of a new special drought relief milk range.
The major supermarket plans to launch the range mid-October with the extra 10 cents going to dairy farmers in drought-affected areas.
The drought relief milk will sell at $1.10 a litre with the range also offering additional two litre and three litre varieties at $2.20 and $3.30 respectively.
The idea of a 10-cent levy was floated two weeks ago by dairy farmer Shane Hickey from Kyogle in northern New South Wales and the Queensland Dairyfarmers Organisation (QDO).
Mr Hickey said the news from the supermarket was “awesome” and “absolutely excellent”.
“I’m really happy that they’ve actually stood up and taken the lead — that’s an amazing job,” he said.
“A lot of farmers have been extremely frustrated that it hasn’t happened sooner because if you go around the Darling Downs or out west of New South Wales here it’s really bad and they need the money now.
“Everybody knows that we’re all underpaid by about 20 per cent, the value of milk is quite poor and all the farmers need the money now and the supermarkets have been holding off.”
But the dairy farmer said that 10 cents a litre would not go very far and that it needed to be 20 cents for farmers to try to cover all costs.
“Ten cents is a start; I just pray to God that the supermarkets do see that milk is valued and people want it,” he said.
“We’ve just got to hope for rain, and we’ve just got to hope we can continue with this and continue moving forward.”
Woolworths has confirmed the extra 10 cents will be passed onto suppliers of its own brand fresh milk in drought-affected areas through its fresh milk processors.
It will set up a drought relief oversight committee to ensure that the 10 cents is distributed to the dairy farmers impacted by the drought conditions.
Federal Agriculture Minister applauds Woolworths’ leadership
The Federal Agriculture Minister David Littleproud had backed the calls for a 10 cent a litre drought levy and said this was a win for dairy farmers.
“Proudly, Woolworths has shown the courage and leadership to stand up,” he said.
They said from the get-go that they were prepared to go on that journey — initially they said only if the other retailers came with them but instead they’ve broken ranks and gone out on their own.”
“So that took courage and leadership and they need to be congratulated with that and retailers should come on that journey in supporting our dairy farmers.”
Move welcomed by dairy farmer lobby group
QDO vice-president, Matthew Trace, said the move by Woolworths sounded very promising.
“We’re finally seeing movement at the retail side and retailers wanting to assist farmers is exactly what we want,” he said.
He said the public support for the grassroots campaign begun by Shane Hickey and the QDO has been unbelievable and immense.
“I know many dairy farmers that are so happy the community is supporting them, they are so grateful,” he said.
“[Dollar a milk] has been a big issue for a long time … but this is all about the consumers, our consumers taking control and not letting supermarkets tell them what they want but the consumers telling the supermarkets how it should be.”
But Mr Trace cautioned that it was not entirely clear if Woolworths’ levy was going to be on all milk.
“While many consumers think 10 cents a litre is not a great hit to them personally, for it to be an effective program we really need the 10 cents to go across all milk sold in the supermarkets.”
He said increasing the price of milk, for drought relief, was a very important step in breaking the cycle of consumers seeing dairy as a discount product.
“It’s so important that we see the entire value chain represented here — not just one section but all dairy products,” he said.
Coles responds and lifts price of three-litre milk
When the call was made for the 10-cent drought levy on milk, Coles responded that it was doing enough to assist drought-affected farmers.
But today the supermarket followed its rival Woolworths by revealing that it too would increase the price of its milk, but only for its 3-litre Own Brand Milk.
Coles will lift the price from $3 to $3.30 from today until the end of the year with 100 per cent of the increase donated to farmers affected by the drought.
A Coles spokesperson said the supermarket chain had always supported Aussie farmers.
“Coles and our customers have already committed almost $12 million to drought relief, including $5 million from the Coles Nurture Fund to assist drought-affected farmers,” the spokesperson said.
“Coles for a number of years has sold a range of milk brands with a percentage of sales going to support dairy farmers in Victoria, South Australia and Western Australia.”
The Federal Agriculture Minister David Littleproud congratulated Coles on coming to the party to help farmers.