Coles, Woolworths, and Aldi have Reduced the Price of Generic Fresh Milk
Source: DairyNews.today
For the first time since 2011, Australian supermarket giants Coles, Woolworths, and Aldi have reduced the price of generic fresh milk, sparking renewed concerns among dairy farmers. Coles and Woolworths lowered their one-litre milk prices by 5 cents to $1.55 in September, with Aldi following suit in October.
This reduction has prompted warnings from dairy industry leaders about the potential revival of the "milk wars," which previously led to severe financial hardship for farmers.
Mark Billing, president of Dairy Farmers Victoria, expressed deep concern over the impact these price cuts may have on the dairy sector. “It’s extremely frustrating… margins are really, really tight,” Billing said, emphasizing that the devaluation of milk could push many farmers toward financial instability. With milk already treated as a “discount leader” by retailers to attract customers, Billing worries that the recent cuts may mark the beginning of another period of challenging times for the industry.
Coles and Woolworths have attributed the price drop to reduced costs from milk processors. A Woolworths spokesperson explained, "We've reduced the price… to pass on the savings we're receiving from our processors." Despite these assurances, Billing remains skeptical about the timing and strategy behind the reduction, particularly as the Australian Competition and Consumer Commission (ACCC) has initiated legal action against the supermarkets over alleged misleading discount pricing practices.
The current price cuts come as Australia faces a decline in milk production, now at its lowest level in 30 years. The number of Victorian dairy farms has fallen sharply, dropping from 7,409 around 2000 to just 2,796 today, with 8% of remaining dairy farmers exiting the industry last year alone. This trend highlights the increasingly difficult landscape for dairy producers who have seen slim profit margins further diminished by volatile market conditions.
“Farmers are resilient, but there’s a breaking point,” Billing cautioned. As milk prices fall, the dairy industry is left grappling with an uncertain future, with many concerned that lower prices at the checkout will come at a significant cost to farmers’ livelihoods.
Mark Billing, president of Dairy Farmers Victoria, expressed deep concern over the impact these price cuts may have on the dairy sector. “It’s extremely frustrating… margins are really, really tight,” Billing said, emphasizing that the devaluation of milk could push many farmers toward financial instability. With milk already treated as a “discount leader” by retailers to attract customers, Billing worries that the recent cuts may mark the beginning of another period of challenging times for the industry.
Coles and Woolworths have attributed the price drop to reduced costs from milk processors. A Woolworths spokesperson explained, "We've reduced the price… to pass on the savings we're receiving from our processors." Despite these assurances, Billing remains skeptical about the timing and strategy behind the reduction, particularly as the Australian Competition and Consumer Commission (ACCC) has initiated legal action against the supermarkets over alleged misleading discount pricing practices.
The current price cuts come as Australia faces a decline in milk production, now at its lowest level in 30 years. The number of Victorian dairy farms has fallen sharply, dropping from 7,409 around 2000 to just 2,796 today, with 8% of remaining dairy farmers exiting the industry last year alone. This trend highlights the increasingly difficult landscape for dairy producers who have seen slim profit margins further diminished by volatile market conditions.
“Farmers are resilient, but there’s a breaking point,” Billing cautioned. As milk prices fall, the dairy industry is left grappling with an uncertain future, with many concerned that lower prices at the checkout will come at a significant cost to farmers’ livelihoods.
