The industry has tallied the results, and say they’ve saved shoppers $175 million by slashing milk prices.
Coles’ Merchandise Director John Durkan says “it's not milkshakes in the boardroom, but we're celebrating the fact that we've now had milk prices down for a year.”
Out of the 2.3 billion litres of drinking milk produced at a large dairy farm, a drop over half goes into supermarket sales.More stories from Today Tonight
For supermarket giants like Coles, it's liquid gold through the checkouts, and that’s what triggered the $1 per litre milk campaign.
The introduction wasn't easy, with a lengthy Senate Inquiry.
“We expected that there would be some discussion around our milk pricing. It's really important to Australian farmers, so it’s really important that we look after them. We came out of the Senate in good shape - they said this was pro-competitive and great for consumers,” Durkan said.
Durkan was relieved Canberra gave the strategy the green light, and with three children under her roof, Lidia Ribarvska concurs.
Ribarvska goes through nine litres of milk a week, so this year she's saved almost $260. She's one of the winners in the milk wars.
“We’re enjoying the fact that we are spending only $1 a litre on milk. We’re saving at least $4 to $5 a week,” she said.
Ribarvska’s kids think all milk tastes the same, and that may be so, but talk to some farmers and the conversation curdles.
“We've lost 30 farmers in Queensland in the last year, and I suspect there's probably two to three times that amount just hanging on,” Queensland dairy farmer Paul Roderick said.
Chat with the fifth generation dairy farmer, and tomorrow is no day to celebrate when it comes to cut priced milk.
“Processors lose profit, and then that has to be passed onto the farmers eventually. That has happened, and will continue to happen. We'll lose $50,000 this year through a three cent a litre drop,” he said.
“None of the farmers that supply Coles will have earned any less money out of our ‘Down Down Campaign’ - that’s a fact because we paid our suppliers more money,” Durkan said.
Roderick doesn’t agree. “I think it's rubbish. It's spin from Coles. It's crap to be honest,” he said.
The dairy industry says its farmers in Queensland, like Paul Roderick, and those in northern New South Wales and Western Australia are being savaged. One supplier told the Senate Inquiry the milk wars had the potential to destroy the dairy industry in those regions.
While the cut price contracts continue over the age-old staple, many dairy farmers continue their protest, and Adrian Peake of Queensland Dairy Farmers' Organisation hears their cries.
“When they do pick up that bottle, what they’re not doing is picking up a branded product, and it’s the branded product that has a sustainable price that helps farming families – it is actually the true value of milk,” he said.
Coles kicked off the campaign, and then Woolworths, ALDI, Franklins and some IGA stores followed. The impact is clear - branded milk sales are down seven per cent, while Coles and Woolworths House Brand milk sales have sky-rocketed by fifteen per cent.
Homogenised, pasteurised, low fat, full fat - it's all white, but it's pushing some farmers into the red.
“The impact on our farm, and the industry as a whole, has been fairly disastrous. Everything that we said would happen, has happened,” Roderick said.
But what's next? Will prices inevitably rise, and is the dollar a litre price too low to sustain? Or have all the house brand milks been boxed into a corner without a choice to change?
“We expect to keep milk prices at their current level,” Durkan said.Peake, on the other hand, says “it needs to stop. The Government needs to step in and rectify the situation.”
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