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09/01/2013Milk War anniversary marked with more cheap cunning from Coles

MOVES today by supermarket giant Coles to devalue fresh milk in its Coles Express stores demonstrate that the supermarket giant has learnt nothing from the last two years of the supermarket price war, and shows a disregard for the sustainability of the rest of the milk value chain, the Queensland Dairyfarmers’ Organisation says.

QDO President Brian Tessmann said it was a shallow marketing tactic from Coles, but one that would continue to wreak havoc on fresh-milk orientated dairying States such as Queensland.

“Since Australia Day 2011 when the ruthless milk discounting began, we’ve lost more than 55 farmers from the Queensland industry and the impact on farmers’ profitability is clear in terms of reduced farm-gate returns,” Mr Tessmann said. “The result has been that Queensland has been short of milk at times of the year, with $1/litre milk simply not giving a fair return to dairy farmers and other parts of the supply chain.

“2012 was supposed to be the Year of the Farmer, but anyone looking at the dairy cabinet in a Coles supermarket would not have known it. With Coles’ profits up 16.3 percent on the previous year, it is hard to see how Coles and its executives are showing a fair regard for the farmers that supply fresh milk to their stores, every day of the year.”

Mr Tessmann said the move to discount fresh milk at Coles Express would put enormous pressure on existing corner stores and milk bars, representatives of which had told recent Senate inquiries of the risks to their business from the supermarket duopoly and the fact that many had already been squeezed out of business.

“Dairy farmers would strongly dispute any claims from Coles that it could sustainably price milk at a $1/litre, given the costs involved in producing, processing, transport and distribution. Dairy farmers see that the market has failed and this is yet another urgent example for the ACCC to investigate predatory pricing.

“The question for concerned consumers should be about the impact on the prices of other products from Coles supermarkets and Coles Express stores.”

Mr Tessmann said that it was a lose-lose situation all round, and another clear example of the need for the Federal Government to work with industry on establishing a code of conduct and a supermarket ombudsman to address the extreme pressures of the industry.

“At the same time we need consumers to support dairy farming families by not buying $1 milk and purchasing local fresh milk brands and supporting their local independent corner stores.”



Media Enquiries:    Brian Tessmann, QDO President, 0427 622 537

                              Brad Pfeffer Media Officer (07) 3837 4747


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