Woolworths to stop selling $1 milk

SAMANTHA BAILEY
FEBRUARY 18, 2019
BUSINESS REPORTER
Supermarket chain Woolworths will pull dollar-litre milk off its shelves around the country in support of a more sustainable Australian dairy industry.
The move follows heavy criticism of Coles and Woolworths for selling fresh milk for $1 a litre, which critics said was hurting drought-affected farmers.
From tomorrow, Woolworths will sell its own branded two and three litre fresh milk for $2.20 and $3.30 respectively.
Every cent of the increase will end up with Australian dairy farmers, Woolworths said in a statement.
In September, dairy farmers called for a 10-cent-a-litre levy on all milk sales to help farmers battling drought, which Coles Woolworths implemented temporarily.
Both supermarkets lifted the price of their three-litre generic milk $3.30 from $3, with the extra money given to drought-stricken producers.
Woolworths’ levy was to apply until mid-October, when it introduced a special drought relief range of milk at $1.10 per litre in Queensland, New South Wales, ACT and Victoria.
That range had delivered $5.8 million in relief to more dairy farmers since, Woolworths said on Monday, and as the price change goes national, it will deliver higher milk prices to more than 450 Australian dairy farmers who supply Woolworths’ branded milk.
“We’re acutely aware of the budgetary pressures facing many of our customers and have not taken this decision lightly,” Woolworths chief executive Brad Banducci said.
“We believe it’s the right thing to do and a key step in shoring up fresh milk production in Australia. We’ll continue to work very hard to offer great value to our customers across their total shop.”
At about 10.40am (AEDT), shares in Woolworths were trading 1 per cent higher at $30.34, while Coles shares had lowered 0.1 perc cent to $12.59.
Australian Dairy Farmers chief executive David Inall called the announcement by Woolworths, a “game changer” in the fight against discount milk.
“It is reassuring that Woolworths has committed to deliver the full 10 cent increase back to those farmers who supplied the milk into that product category,” he said.
“Removing $1 milk is not just intended to restore farmers’ financial confidence, but it will also boost confidence in regional communities and small businesses that rely on the industry.
“Consumers can buy fresh milk from Woolworths knowing they are supporting the Australian farmers who supplied it.”