Coles dismisses dairy farmer price concern

29 Mar, 2012 04:00 AM
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"We are the fresh food people." - Michael Partridge, Brunswick, told Coles corporate affairs manager Robert Hadler at the WAFarmers Centernary Conference.

DAIRY farmers grabbed the opportunity to grill Coles management over its $1 a litre milk campaign at last week's WAFarmers Centenary Conference.

Coles corporate affairs manager Robert Hadler was invited by WAFarmers to make a presentation on what Coles was up to and question time after Mr Hadler's speech gave Brunswick dairy farmer Michael Partridge the opportunity to say what many dairy farmers, and many farmers throughout WA, were thinking.

And Mr Hadler was left under no illusions as to how Mr Partridge felt on Coles' discounting campaign.

"I am a fresh food producer as opposed to a corporate retailer which happens to sell a product for the highest profit and return for its shareholders," Mr Partridge said.

"You (Coles) don't produce more people, you don't make people eat more food, if you didn't exist we would sell as much food as we do now whether you were here or not.

"It would be sold by many other people in the marketplace.

"You and your friends Woolworths may call yourselves the fresh food people, but (farmers) are the fresh food people - you are just retailers.

"Nobody would go hungry if you didn't exist.

"They go hungry when you do exist."

Mr Partridge launched his attack on Coles and received applause from the farmer dominated audience.

He said Coles' $1/L campaign had taken $25 million out of the dairy industry.

"You don't sell more milk because it is $1/L," he said.

"You don't get more customers because it is $1/L because Woolworths sell it for $1/L and IGA sells it for $1/L.

"So if you all went to a $1.20 tomorrow nothing would change, you would just have another 20 cents in your pocket, because you would probably keep that for yourselves.

"Unfortunately we have had this conversation where you say you value farmers but you don't value us."

Mr Partridge said he had met with a number of Coles and Wesfarmers representatives in the past on this issue and said he was told to find other markets outside of WA.

A task easier said than done according to Mr Partridge who said the WA dairy industry was built around providing fresh produce to the WA market.

"We are a domestic market which is set up to produce fresh produce everyday for WA," he said.

"We don't care if you buy butter and cheese from the Eastern States because they are better at doing it, they do it seasonally.

"We are good at producing fresh milk products every single day of the year and we have had the value taken away by you guys."

On February 23 this year, Farm Weekly reported that 150,000 litres of milk was being trucked from South Australia to WA, a situation that caused much anger in the WA dairy community.

Mr Partridge said this had also happened in 2008 and, back then, WA dairy farmers responded by dropping their price significantly, something he said they could no longer afford to do.

"At the moment we don't have the ability to do that," he said.

"You (Mr Hadler) are good at selling a story but I haven't bought it."

Mr Hadler responded by saying Coles was looking for ways to establish a win-win for both the customer and the farmer.

"I respect your view," Mr Hadler said.

"The one observation I would make is that farmers are very far removed from the customer.

"We (Coles) are very close to the customer.

"We try and work with our suppliers to deliver a win-win, which I have talked about today.

"But the agribusiness supply chain is so complex and long and lacks so much transparency that myths and prejudices are branded.

"The WA dairy industry hasn't suffered a $25 million fall in revenue as a result of Coles' retail discount, it just hasn't - full stop.

"There is no evidence of that.

Mr Hadler said the problems in the WA dairy industry were clearly a result of the collapse of Challenge Dairy.

"And we are still suffering from it," he said.

"But you can't keep going to that. You have got to go forward and going forward means winning with the customer.

"Naturally you can say let's close all the Coles and Woolies stores because somebody else will sell it.

"They might, but they might not."

Mr Hadler said if Coles wasn't in the marketplace it's 11,000 employees and millions of customers would suffer.

"Because prices will go up - you can shake your head but these are the simple facts - prices will go up but will farmers get more of that price? I doubt it," he said.

"If we really wanted to increase profit, we could do that tomorrow simply by increasing prices.

"That's the easy way but we have reduced prices to sell more, that's the arithmetic.

"We are not trying to hurt you.

"We are trying to grow your business but we are doing it in ways that are successful to your customers."

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READER COMMENTS

THE FARMER
29/03/2012 10:45:46 AM, on Farm Weekly

And when SA runs short Robert will you truck it in from Victoria or ship it it from N.Z.
Cattle Advocate
31/03/2012 1:17:49 PM, on Farm Weekly

How is importing milk from SA good for WA milk consumers, when common sense tells us that you could pay WA Dairy Farmers 15cents/lt more to produce this milk and still be ahead on the freight rate? A rate that consumers will have to pay a carbon tax on. Educated opinion suggests that the industry to fight global warming will grow to be the 2nd largest civilian industry after Oil . How much closer do WA dairy farmers have to be to their customers ?
Cattle Advocate
31/03/2012 1:47:07 PM, on Farm Weekly

Woolworths has stated that selling milk for $1/lt is unsustainable, does Coles know something about our dairy industry that Woolworths doesnt? To truck fresh milk from Vic to WA would be like Londoners pouring fresh milk on their corn flakes that was trucked in from Turkey. If the ' Grand Plan ' that drove down fresh milk prices in the UK to 80cents/lt , is the medicine needed to cure the ills of WA milk consumers; we are sorry to hear that , but we didnt know you were sick? As for the scare that consumers will stop drinking milk if its price rises 20cents/lt then it must be terminal .
Cattle Advocate
31/03/2012 2:10:04 PM, on Farm Weekly

Will the Execs take a pay-cut to help pay for the funeral; and will WA Dairy Farmers share the same grave? And who will employ all those people who service the WA dairy industry? '' We are trying to grow your business but we are doing it in ways that are successful to your customers '' Pull the other one; or is this issue really about market share? PS The jokes about SA milk going east have already started.
Cattle Advocate
3/04/2012 7:48:38 PM, on Farm Weekly

Will S/Ms buy their own milk processing plants and dairy farms ,to show their customers exactly where their milk comes from, and cash in on the rivers of gold they say with flow from their Grand Plan, and replace some of our 40,000tns of dairy imports P/A ? A city milk customer held a secret desire, to one day bath in milk; during a milk strike a dairy farmer offered to grant her wish ! Can the fly-by-nighters match that; and Ernie's milk cart ? How many Cleopatras are there really out there?

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