Supermarket giant Coles has announced an increase in the price of its private label milk following significant industry pressure and an earlier move by Woolworths.
The supermarket will increase its Coles Brand milk by 10 cents to $1.10 per litre for its two and three litre milk products.
The move comes almost one month after Woolworths announced it would end the practice of $1 milk, and coincides with a decision by smaller chain Aldi to do the same.
The industry has praised Coles for its move towards supporting local dairy farmers after the long running price war which many say played a role in crippling the Australian diary industry.
"Coles has made the right decision to increase the price of its discounted milk brand and they should be commended for their initiative in working to end the price-freezing practice," Australian Dairy Farmers (ADF) chief executive David Inall said.
Coles stated that they will 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.
"Coles sources 100 per cent of our Coles Brand fresh milk from Australian farmers, many of whom are struggling as the impact of drought compounds ongoing challenges in the dairy industry," Coles Group Chief Executive Officer Steven Cain said.
"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.
"However we know that many dairy farmers cannot wait for structural reform to be delivered so we are moving to provide relief right now."
National Farmers' Federation CEO Tony Mahar said the dairy industry continues to face difficulties and an increase in the supermarket price, while whole-heartedly welcomed, was not a silver bullet.
"The implementation of the Mandatory Dairy Code of Conduct, agreed to last year by Government and industry, is crucial.
"This move by the retailers and the implementation of the Code will go some way towards rebuilding confidence in the Australian dairy sector and an equitable and sustainable relationship across the supply chain.
"With improvements such as these; improved market access opportunities and ongoing collaboration across the supply chain, we look forward to a turnaround in the outlook for dairy farmers," Mr Mahar said.
