Calls to boycott Aldi and Coles over stance on $1 milk

Aldi will stand by Coles in continuing to sell $1 milk despite calls for a boycott.

Woolworths has raised the price of its supermarket branded milk by 10c per litre.

It followed years of cries and pleas from the struggling dairy farming industry however Coles and Aldi won’t be increasing their prices.

In a statement, Aldi Australia’s managing director of buying Oliver Bongardt said the supermarket would work with suppliers instead of producers as “we have direct relationships”.

He added the supermarket did not support “retailer-led initiatives”.

“In the case of milk, our suppliers are the major milk processors,” he said.

“To this end, Aldi has accepted significant cost price increases in recent times from our milk processors to properly reflect market conditions. We in turn expect all our suppliers, including milk processors, to deal fairly with primary producers by paying sustainable prices.”

Mr Bongardt added the supermarket had made pricing decisions “on many factors” including retail prices across the market.

“Aldi will continue to monitor retail prices in the market and continue its ongoing engagement with our milk processors to ensure we pay appropriate and sustainable cost prices and in turn that they act in good faith with dairy farmers,” he said.

“Aldi is not supportive of retailer-led initiatives that seek to bypass the normal supply chain and channel money directly from retailers to primary producers, whether for the dairy industry or any other of the many agricultural sectors currently impacted by difficult conditions.”

He added Aldi supported the final report from Australian Competition and Consumer Commission’s dairy inquiry, published last year, which had recommendations for structural reform including the introduction of a mandatory code of conduct.

On Tuesday, Coles said it would not axe its $1-a-litre milk, citing cost of living pressures on customers.

It said it would look for other ways to help farmers, including collecting customer donations and matching them dollar for dollar from next week.

Aldi ‘hiding under the stairs’

Agriculture Minister David Littleproud accused Aldi of “hiding under the stairs” and hit out at Coles for failing to follow Woolworths.

He claimed dairy farmers struggling with the drought needed an end to Australia’s “$1 milk disaster”, a price war that began eight years ago and has been blamed for sending some farmers to the wall.

“Publicity stunts like (Coles) asking shoppers to donate at the counter to help struggling farmers are just a smokescreen to hide the fact they pay bugger all for milk,” Mr Littleproud said.

“The farmers wouldn’t need donations from the public if Coles and Aldi paid fair prices.”

Coles also pointed out it had committed $16 million over the past six months to support dairy farmers, and promised to continue liaising with the industry and the ACCC.

But the minister said Coles had been saying that since August.

“So now it’s time to put up or shut up. Act like a decent corporate citizen instead of just pretending to,” Mr Littleproud said.

Farm gate prices to farmers depend on milk fat and protein content, and agreements with processors that vary from state to state.

But the average, according to the Dairy Australia website, was about 46 cents per litre at the farm gate in 2017/18.

Mr Littleproud said Australians should send a message with their wallets, and switch their business away from Coles and Aldi.

Dairy Connect, an advocacy group for dairy industry players, echoed that call, saying consumers could help force Coles and Aldi to change their ways.

“Shareholders ought to be ashamed at the way Coles has conducted itself,” Graham Forbes, a NSW dairy farmer and Dairy Connect farmers’ group president, said.

“And Aldi are very hard-nosed. If they don’t change their mind they’ll be dealing with processors with no milk.”

With AAP

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