Brian Tessmann
QDO president Brian Tessmann

February 18, 2019

Queensland dairy farmers and local politicians have praised the decision by Woolworths to effectively call a truce in the supermarket milk war.

Coles fired the first shot in the “milk wars” on Australia Day in 2011 when it announced it would cut the price of its home brand milk to $1-per-litre.

Woolworths quickly followed suit.

But Woolworths announced on Monday it will continue what was known as its “drought levy” indefinitely, meaning it will no longer sell milk for $1.

Queensland Dairyfarmers Organisation president Brian Tessmann said the milk war had crippled the dairy industry for eight years.

He praised Woolworths for showing “understanding, empathy and a social conscience that is so dearly lacking in other major companies”.

“It will make a massive difference to the dairy farmers who supply Woolworths milk across Australia,” Mr Tessmann said.

“Their leadership with their Drought Levy branded milk mid last year showed that the supermarket giant truly appreciated the need to support farmers and to address unsustainable pricing.

“QDO asks all consumers to support Woolworths by shopping at Woolworths. Customers can be confident that any milk they buy in a Woolworths store will help dairy farmers.

“Woolworths deserves to be supported by all consumers for the great leadership they have shown on this crucial issue for dairy farmers.

“Customers can be extremely confident that if the buy Woolworths branded milk that 10c/L will go back to farmers. Woolworths has a track record of ensuring every cent collected goes back to farmers after the highly successful and transparent drought levy that Woolworths have applied in Queensland and NSW for the past five  months.

“Finally, QDO pleads for all other retailers to follow the leadership shown by Woolworths and apply an additional 10c to all retailer branded milk with all proceeds to go directly back to farmers. If you walk into a shop and they still sell milk for $1/L, turn around and leave the shop and go to the retailer than supports dairy farmers like Woolworths.”

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Federal Member for Wide Bay Llew O’Brien welcomed the end of the Woolworths dollar milk pricing.

“While 20 cents per two litre bottle of milk is only a very small change, it’s a big change that benefits the dairy industry to sustain dairy farmers,” Mr O’Brien said.

“I commend Woolworths for acting responsibly by removing the dollar milk price cap, helping dairy farmers get a better return for their product.

“Now that Woolworths has removed dollar milk from their shelves, Coles and Aldi have nowhere to hide. It’s time for Coles and Aldi to look after their dairy farmers, remove the dollar cap, and pay them a fair price.”

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Federal Agriculture Minister David Littleproud also welcomed the news.

“The $1 milk disaster began on January 1, 2011, and I hope today is the beginning of its end,” Mr Littleproud said.

“Whilst I wish Woolworths was taking a much bigger step, they’re miles head of their competitors and its sad it has taken National Party pressure to get to this point.

“Consumers have the power here. If everybody who clicks ‘like’ on a Facebook video bought branded milk instead of cheap supermarket brand milk, or punished Coles and Aldi by going elsewhere, big changes would occur overnight.

“All supermarkets should pay a fair price for all dairy – this includes cheese and yoghurt, not just fresh milk, which is a small fraction of the market.

“The ACCC report into the dairy industry clearly says supermarkets use their market power to drive down how much they pay processors, and processors then use their bargaining power to drive down what they in turn pay farmers.

“There were around 7500 dairy farmers in 2010 and now there are just under 6000 as the industry has consolidated.

“Coles and the big German Aldi must begin to charge consumers a fair price for milk immediately. There’s no point having cheap milk for consumers today if it sends farmers broke.”

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Queensland Shadow Agriculture Minister Tony Perrett commended Woolworths and acknowledged the continued advocacy of the QDO.

“The announcement that Woolworths will end the milk wars is great news for the entire dairy industry in Queensland,” Mr Perrett said.

“For too long, our hard-working dairy farmers have been sacrificed just so our supermarkets can increase their margins.

“This announcement will finally allow farmers to start getting paid what it actually costs to produce their product.”

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