January 15, 2013
The Queensland Dairyfarmers’ Organisation says supermarket giant Coles has marked the second anniversary of the “milk war” by extending its discounts at the expense of Queensland dairy farmers.
The QDO said dropping the price of fresh milk in its Coles Express stores demonstrated the supermarket giant had “learnt nothing from the last two years of the supermarket price war, and shows a disregard for the sustainability of the rest of the milk value chain”.
QDO President Brian Tessmann said it was a shallow marketing tactic from Coles but one that would continue to wreak havoc on fresh-milk orientated dairying States such as Queensland.
“Since Australia Day 2011 when the ruthless milk discounting began, we’ve lost more than 55 farmers from the Queensland industry and the impact on farmers’ profitability is clear in terms of reduced farm-gate returns,” Mr Tessmann said.
“The result has been that Queensland has been short of milk at times of the year, with $1/litre milk simply not giving a fair return to dairy farmers and other parts of the supply chain. 2012 was supposed to be the Year of the Farmer, but anyone looking at the dairy cabinet in a Coles supermarket would not have known it.
“With Coles’ profits up 16.3 percent on the previous year, it is hard to see how Coles and its executives are showing a fair regard for the farmers that supply fresh milk to their stores, every day of the year.”
Mr Tessmann said the move to discount fresh milk at Coles Express would put enormous pressure on existing corner stores and milk bars, representatives of which had told recent Senate inquiries of the risks to their business from the supermarket duopoly and the fact that many had already been squeezed out of business.
He said it was a “lose-lose” situation all round. He again called on the Federal Government to work with the industry on establishing a code of conduct and for a supermarket ombudsman to address the extreme pressures of the industry.
“At the same time we need consumers to support dairy farming families by not buying $1 milk and purchasing local fresh milk brands and supporting their local independent corner stores,” Mr Tessmann said.
