Coles to go direct to WA dairy farmers

By Mal Gill
Updated May 26 2020 - 11:34am, first published 8:00am
While a few dairy farmers might get more for their milk, Coles extending its direct sourcing model into WA will not generally be of benefit to the local dairy industry according to WAFarmers dairy section president Michael Partridge (pictured).
This (direct sourcing model) does absolutely nothing to replace the millions of dollars of value that $1 a-litre-milk stripped out of the supply chain, Mr Partridge, a Benger dairy farmers and Lion Dairy & Drinks supplier, said.
Between five and 10 farmers may be paid a little bit more for their milk by Coles, but it does nothing for the dairy industry generally.
(Federal Agriculture Minister) David Littleproud asked the supermarkets to lift their prices to processors so the whole industry would get some benefit.
This doesnt do that, only a small number of farmers will benefit.
It creates more uncertainty.
Coles needs to be asked if giving contracts to a few farmers will replace its voluntary levy that benefits all dairy farmers what happens to that levy now? he said.
In March last year Coles, Woolworths and Aldi supermarkets ended $1-a-litre retail pricing by adding 10c per litre to the retail price of own-brand milks, with the additional money passed back to dairy farmers via processors.
Because the extra 10c/lt was shared with all dairy farmers, rather than going back to just those who provided milk that went into supermarket own brands, it was worth about 3.5c/lt extra at the farmgate for Lion Dairy & Drinks suppliers and about 2.5c/lt extra for Brownes Dairy suppliers.
While a few dairy farmers might get more for their milk, Coles extending its direct sourcing model into WA will not generally be of benefit to the local dairy industry according to WAFarmers dairy section president Michael Partridge (pictured). This (direct sourcing model) does absolutely nothing to replace the millions of dollars of value that $1 a-litre-milk stripped out of the supply chain, Mr Partridge, a Benger dairy farmers and Lion Dairy & Drinks supplier, said. Between five and 10 farmers may be paid a little bit more for their milk by Coles, but it does nothing for the dairy industry generally. (Federal Agriculture Minister) David Littleproud asked the supermarkets to lift their prices to processors so the whole industry would get some benefit. This doesnt do that, only a small number of farmers will benefit. It creates more uncertainty. Coles needs to be asked if giving contracts to a few farmers will replace its voluntary levy that benefits all dairy farmers what happens to that levy now? he said. In March last year Coles, Woolworths and Aldi supermarkets ended $1-a-litre retail pricing by adding 10c per litre to the retail price of own-brand milks, with the additional money passed back to dairy farmers via processors. Because the extra 10c/lt was shared with all dairy farmers, rather than going back to just those who provided milk that went into supermarket own brands, it was worth about 3.5c/lt extra at the farmgate for Lion Dairy & Drinks suppliers and about 2.5c/lt extra for Brownes Dairy suppliers.

FROM October Coles Group will deal directly with Western Australian dairy farmers for its Coles brand fresh white milk.

Get the latest WA news in your inbox

Sign up for our newsletter to stay up to date.

We care about the protection of your data. Read our Privacy Policy.