Some dairy farmers may get a boost in their milk price after Coles and Woolworths announced the end of $1 litre milk on some lines.
Woolworths led the move in February and was followed by Coles committing to raise the price of its discount milk lines by 10 cents to $1.10 per litre, with the entire price increase going back to the farm gate.
Aldi Australia has also committed to raising its prices.
Peak dairy farmer group Australian Dairy Farmers praised Coles for the move.
“Coles has made the right decision to increase the price of its discount milk brand and they should be commended for their initiative in working to end this price-freezing practice,” ADF chief executive David Inall said.
“Farming families put tireless effort and resources into producing a quality product and there is no question that supermarket discounting has had an incredibly demoralising and negative financial impact on the Australian dairy industry over the last eight years.”
The price of Coles Brand 2 litre milk will rise to $2.20, with 3 litres rising to $3.30 as a result of the increase.
The supermarket said it would “work with dairy processors to ensure that the benefit of this retail price increase will go directly to the dairy farmers who supply Coles brand milk to our customers”.
Advocacy group Dairy Connect welcomed the announcement by ALDI Australia to increase its private label range of 2 litre and 3 litre milks by 10 cents per litre.
“We need to ensure a strong Australian dairy industry with a fair farm gate price, above the cost of production, to ensure a long-term sustainable Australian dairy industry,” Dairy Connect chief executive Shaughn Morgan said.
He said Dairy Connect supported further structural reform and looked forward to discussing how this might be achieved with Federal Minister for Agriculture David Littleproud and Shadow Minister Joel Fitzgibbon in the lead-up to the federal election.
“All options must be on the table for discussion, from the appointment of a Federal Dairy Commissioner overseeing dairy-wide industry issues, a strong Dairy Mandatory Code through to investigating a dairy floor price providing a ‘minimum wage’ for dairy farmers,” Mr Morgan said.