| 20.03,19. 07:09 AM |
Supermarket giants fold to public pressure with pledge to raise milk prices by 10 cents a litre
Photo: Coles and Aldi have said the proceeds from the price increase will go to farmers. (ABC Rural: Brett Worthington)
Major retailers Coles and Aldi have increased the price of cheap milk in a bid to help struggling dairy farmers.
The supermarkets had been under pressure to follow competitor Woolworths, which increased the cost of its home-brand milk by 10 cents per litre last month.
Agriculture Minister David Littleproud recently called on Australian shoppers to boycott Aldi and Coles for as long as the supermarkets continued to offer cheap milk.
Coles and Aldi both issued statements on Tuesday night announcing the price of two and three-litre home brand milk at their stores would increase by 10 cents per litre from March 20.
Coles described the price increase as an interim measure, and Aldi said the price hike was a short-term solution.
Both supermarkets said the proceeds would be passed on to dairy farmers.
"This victory is a good start in the war against $1-a-litre milk," Mr Littleproud said.
"I welcome this news and I encourage supermarkets and processors to spread this right across the dairy range."
Coles chief executive Steven Cain said drought had compounded many of the difficult issues Australian dairy farmers are facing.
Announcing the price increase, Mr Cain said the retailer was "continuing to explore long-term solutions with government and industry stakeholders" to help the dairy industry.
"However, we know that many dairy farmers cannot wait for structural reform to be delivered so we are moving to provide relief right now," Mr Cain said.
In a written statement, Aldi Australia spokesman Oliver Bongardt said the German retailer would work with dairy processors to support the long-term viability of the dairy industry.
"Our decision to increase fresh milk prices has been reached in recognition of the significant issues currently impacting the dairy industry and the fact that broader government-led policy reform is unlikely to occur in the short term," Mr Bongardt said.
The price increase comes as Australian dairy farmers are expected to produce the lowest level of milk since the mid-1990s.
A growing number of dairy farmers are exiting the industry, saying it costs more to produce the milk than they are paid for it.
Drought, a downturn in crucial export markets, and high feed, water and electricity prices have made it difficult for farmers to compete since a global downturn in mid-2016