Tuncester farmer Paul Weir says discount prices will hurt milk producers.
Tuncester farmer Paul Weir says discount prices will hurt milk producers. Jacklyn Wagner

Milk price boycott call

DAIRY farmers have called on North Coast residents to boycott discounted own-brand milk sold at supermarkets after Coles slashed the price of its milk to $2 for a two-litre bottle.

Coles has vowed to maintain existing payments to suppliers and pay for the 99 cent price cut out of its own bottom line.

However, Tuncester dairy farmer Paul Weir said he feared the move would trigger a price war for milk across all supermarkets that would savage dairy farmers already reeling from the impact of floods and months of rain.

Mr Weir said the wet weather, topped off by local floods, had ruined the silage and grain crops grown locally by farmers to feed their herds.

At the same time major floods had trashed swathes of thenation’s wheat and cotton crops, pushing up prices and making it harder to buy feed.

In that environment he said the decision to introduce deep price cuts in Coles brand milk was “totally irresponsible”.

Mr Weir said the move would trigger a price war across supermarkets and between brands as they tried to maintain their share of the market.

That was good news for consumers, but for farmers and the rural communities that benefited from them, it was another step in the wrong direction for a product they believed was already under-priced.

“From Coles, Woolies and Aldi will follow and they’ll just keep pushing it back to farmers,” he said. “Even water is dearer than milk. People pay 70 cents a litre in shops for water; they pay $2.50 to $3 for a bottle of water at a take-away store but milk is just as cheap as.”

He said the reliance of consumers on milk had turned it into a drawcard for supermarkets and meant they kept pressuring suppliers, who in turn pressured farmers, to keep prices lower than they could afford.

Those concerns were echoed by peak body Australian Dairy Farmers, which said the $2 price was "unsustainable”.

“The impact of this decision will ultimately flow on to dairy farmers at a time when they are struggling to respond financially to years of drought and now floods,” group vice-president Chris Griffin said.

Coles merchandise director John Durkan said cutting the price of milk, which took effect on Australia Day, followed similar moves with other products in the supermarket’s range and was aimed at easing pressure on consumers.

Mr Durkan said the supermarket was absorbing the price cut even though the farm gate cost of milk had risen.

Mr Weir said milk, along with Coke, was the biggest-selling product in supermarkets. They kept prices down on both to get consumers through the doors, but unlike the Coca-Cola company, dairy farmers were not able to negotiate as a single entity.

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