A fourth-generation dairy farmer says he would prefer to give his milk away for free than sell it as a loss for the benefit of the major supermarket.
Dairy farmers are so “angry and disappointed” with Coles for refusing to hike its milk price he is threatening to tear up his contract with processor Norco.
Woolworths announced earlier this week it will add an extra 10 cents per litre to benefit struggling farmers who would receive “every cent” of the price increase.
But Coles resisted calls to follow its rival, citing cost of living pressures on customers when defending the company’s decision.
Paul Weir, a fourth-generation dairy farmer in northern NSW, is in the top 10 per cent of Norco’s producers with a supply of 2.5 million litres of milk a year, the ABC reported.
The cooperative is contracted to process milk for Coles.
“Full credit to Woolworths for doing it, but words can’t describe how angry and disappointed we are with Coles’ stand,” he told the national broadcaster.
“We’re in one of the worst droughts in history, milk’s dropping down to one of the lowest records in a long time, and everyone around here is doing it tough, feed costs have gone through the roof.
“The fundamental problem is that it’s well under the cost of production, and if this industry is going to be sustainable we need a price rise across the whole dairy cabinet — milk, cheese, yoghurts, butter, the whole lot.”
Mr Weir told the ABC he had contacted Norco asking for an early release from his contract unless the major supermarket changes its tune on the price of milk.
“Their business values and mine just don’t agree, I choose not to do business with people like that and I don’t want any of my milk going through a Coles for them to make profit out of it while I’m sitting here making a loss on it.
“I would much prefer to give my milk away in front of a Coles shop then actually let Coles sell it as a loss just for them to profiteer on it.”
Rather than lift the price of milk, Coles said earlier in the week it would be collecting donations for dairy farmers and matching every dollar raised from Monday.
“One thing I can’t do as CEO of Coles is disadvantage our customers at a time when clearly they’re under household budget strain,” said Coles chief Steven Cain after handing down the company’s first half-year result on Tuesday.
“We’ve been one of the main supporters of farmers, we’ve distributed nearly $16 million so far, but it’s important that we don’t disadvantage Coles customers.”
"Woolworths is getting rid of $1 milk. It’s time Coles and Aldi got behind dairy farmers and did the same.
Federal Agriculture Minister David Littleproud on Tuesday took the drastic step to call on shoppers to boycott both Coles and Aldi for refusing to lift the price of its budget milk.
He accused the supermarket chain of “pretending” to be a decent corporate citizen and Aldi of “hiding under the stairs”.
Dairy farmers struggling with drought needed an end to Australia’s “$1 milk disaster”, he said, a price war that began eight years ago and has been blamed for sending some farmers to the wall.
“Publicity stunts like (Coles) asking shoppers to donate at the counter to help struggling farmers are just a smoke screen to hide the fact they pay bugger-all for milk,” Mr Littleproud said.
“The farmers wouldn’t need donations from the public if Coles and Aldi paid fair prices.”
A Coles spokesperson told news.com.au that it continues to support the dairy farming industry.
“Coles has been exploring additional options in relation to how to best support Australia’s hard working farmers, including how we ensure that drought assistance initiatives are as efficient and effective as possible,” the spokesperson said.
“Coles is committed to finding a better model that can be adopted by the industry to assist Australian farmers, and intends to liaise with relevant parties including government and the ACCC.”