'Smoke and mirrors' milk price hike comes too late for some
DAIRY producers have said the decision by Coles and Aldi to raise milk prices by 10c a litre is a step in the right direction, but comes too late for some.
The supermarket giants both announced on Tuesday night they would be increase the price of their two and three litre own-brand milk products, effectively ending the dollar-a-litre milk price wars.
Mt Tarampa dairyfarmer Richard Peterkin supplies milk to Coles, and said it was disappointing it took so long for the supermarket to raise prices.
"I'm not sure why they would hesitate at it," Mr Peterkin said.
"It was only a matter of time before it had to happen."
While price increase is a welcome change for many dairyfarmers, it comes too late for Mr Peterkin and his family's operation.
"It's not going to help us, we've already decided that we need to get out," he said.
While the increase wasn't much, he said it still help a lot of people.
It definitely will make a difference to some peoples' bottom line, but there's still not going to be a lot of fat in it.
The fourth generation dairyfarmer said the movement away from the $1/litre figure showed there was margin for the increase in the supermarkets' bottom lines.
It also meant the increase could expand in the future.
But he said more change was need, and called for radical changes to the industry.
"There needs to be an overhaul of the structure. Three main supermarkets dictate what we get paid, and in turn that reflects our standard of living," he said.
"Why can't we tell them what we need to get paid, and they have to pay that to get our product?"
He also labelled the move away from $1-a-litre milke a PR stunt, and nothing more than "smoke and mirrors".
"They are trying to look like they are doing something without doing anything," he said.
"I doubt we will even see a 5c return to the farm gate."
Coles released a statement saying it was presently paying dairy processors the highest farm gate milk prices in four years, but it was clear that many dairy farmers were struggling as a result of drought.
The statement labelled the price increase an "interim measure".
Coles Group CEO Steven Cain said the retail giant sourced 100 per cent of is Coles brand milk from Australian farmers.
"Coles supports proposals to make Australia's dairy industry more sustainable, and we are continuing to explore long-term solutions with government and industry stakeholders," Mr Cain said.
"However we know that many dairy farmers cannot wait for structural reform to be delivered so we are moving to provide relief right now."
Both Coles and Aldi had initially resisted calls to follow Woolworths' lead and increase prices.
Mr Peterkin said the whole dairy range in Australia needed a major price hike, not just bottled milk.
He warned the farmgate prices were being held down artificially by the US and Canada, who were "dumping" cheap cheese into the domestic market.