Supermarkets' dramatic backflip to raise price of milk

Coles and Aldi have performed a dramatic backflip by following the lead of Woolworths and increasing the price of its milk to support the struggling dairy industry.

The supermarkets confirmed on Tuesday that the price of their two litre and three litre fresh milk would increase by 20 cents and 30 cents respectively, putting an end to their $1 a litre pricing.

The decision may come as a shock to many with the supermarkets refusing to join Woolworths to raise the price of their milk just last month.

Coles Group chief executive officer Steven Cain said his company is endeavouring to help make the dairy industry more sustainable, alongside government and industry stakeholders.

But he said farmers can’t wait for such long-term changes to be made as the supermarket succumbed to mounting pressure.

“We are moving to provide relief right now,” he said.

Oliver Bongardt, Managing Director of Buying ALDI Australia echoed Mr Cain’s sentiments in an online statement late on Tuesday.

“This decision reflects extensive discussions with our milk processors who have worked with us to find a way to pass on the additional proceeds, in full, to the dairy farmers supplying them with fresh milk,” he said.

The supermarket said it had also accepted a cost increase from the processor due to the decision but that wouldn’t be passed on to the customer.

Mr Bongardt said the decision, which will be rolled out on Wednesday alongside Coles’ new pricing, was short-term and reiterated its commitment to the Australian dairy industry.

“We look forward to the introduction of government-orchestrated structural reform in accordance with the recommendations of the ACCC’s 2018 Dairy Inquiry final report,” he added.

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