The Queensland Dairyfarmers' Organisation (QDO) has claimed that Coles' expansion of its dollar-a-litre milk offering to include its Coles Express stores 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 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,” Tessmann said.
“The result has been that Queensland has been short of milk at times of the year, with dollar-a-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.”
Tessmann added that 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.
“Dairy farmers would strongly dispute any claims from Coles that it could sustainably price milk at a dollar per litre, given the costs involved in producing, processing, transport and distribution. Dairy farmers see that the market has failed and this is yet another urgent example for the ACCC to investigate predatory pricing.
“The question for concerned consumers should be about the impact on the prices of other products from Coles supermarkets and Coles Express stores.”
