There has been a great of information and misinformation in respect of the marketing and sale of milk in Australia.  There is an under-current from dairy farmers suggesting that they cannot exist under the rates that they are being paid for their milk, as a result of the pressure of supermarkets to sell their milk at a subsidized rate.

It is appalling the amount of misinformation that is being spread. I want to support our farmers but the reality is all our milk comes from Australian producers. Dairy farmers get paid based on global supply and demand pricing. Check all the producer web sites. It is not clear if any brands are paying farmers more, but those branded “Aussie milk” are populated by companies that appear to be paying the same prices, and most of the companies have multiple brands just with different labeling and marketing. It is not just Coles and Woolies but other retailers too.

There is an opportunity here for an independent review of which companies and brands actually filter dollars through to their farmer suppliers, not just to their shareholders.

Australia’s diary industry has repeatedly said that milk at these prices is not sustainable for dairy farming, and it has resulted in many farmers leaving the industry altogether.

”The last time milk was valued at $1 a litre was in 1992. No one can live on the same wage they did in 1992. Why should farmers have to?”

I have a colleague who is a store manager for one the major supermarket chains.  He states that ALL milk (in NSW at least) comes from from the same supplier, irrespective of how it is packed and what label or sticker is attached to that package.

He further states that the Woolies or Coles brand is subsidised at the point-of-sale, and like “home brand” bread, is sold at below cost.  The loss on these items is compensated by the range of other items sold through the stores.

This seems to fly in the face of media reports that consumers are the winners as a result of the “milk wars” between the major retailers.  Perhaps if they buy milk and nothing else!

Therefore photos of stores with shelves empty of national brands, and with “home brand” milk untouched, is therefore misleading.

The suggestion that farmers are being under-paid is interesting.  In a world of supply and demand, farmers could withhold their product until and favourable price is negotiated, and the response of retailers will be to pass that cost onto their customers.

The shareholders will still do well.

As of 26/05/2016, some Woolworths stores have slashed home brand milk prices to 25c per litre, as Australian shoppers continue their revolt against cheap in-house dairy.