From this week the supermarket chain will sell 2L and 3L milk cartons for $2.20 and $3.30 respectively, with the extra 10 cents a litre collected by Italian dairy giant Parmalat to be handed out to farmers in “drought-affected” regions.
A Woolworths spokesman said the company would consider broadening the funds to Victorian dairy farmers.
Woolworths brought in a 3L drought relief milk carton in late September, which has so far raised about $500,000.
Coles also committed to adding 10 cents a litre to its 3L own-brand milk cartons as part of its drought assistant initiative.United Dairy Farmers of Victoria president Adam Jenkins said he acknowledged the supermarket giants were “doing the right thing”, but pointed out that it was Coles who introduced a “Down, Down” marketing strategy based on low prices.
Rather than a “Band-Aid solution” the industry would prefer a long-term pricing strategy that better reflected the cost of production, he said.
“We’d like to look at the future pricing of milk. The value has to be reflective of the operating environment we’re in — we have really high input costs now and that needs to be taken into account,” Mr Jenkins said.
He said UDV would also like the funding criteria broadened beyond Parmalat suppliers and dairy farmers in NSW and Queensland. “From an industry point of view, we don’t like Band-Aid solutions and we don’t like drought funding being divisive among a farming group, we’re now in a position as to who gets it.
“We are very empathetic to our northern neighbours, but we have serious issues in northern Victoria, in eastern Gippsland and the south west. There’s no doubt the looming drought is quite serious, we’re not out of the woods until next spring,” he said.
Parmalat will begin handing out payments to about 220 dairy farmers across NSW and Queensland from October 15. Funds will be distributed each month based on the volume of milk supplied, with a minimum safety net of $1000 a month for smaller farmers.
Woolworths Director of Fresh Food Paul Harker said he understood the drought relief payments would not fix structural issues in the dairy industry.
“This effort is about providing much needed relief from the devastating effects of drought, while government and industry work through the reforms needed to sustain the sector longer term,” Mr Harker said, referring to the reforms proposed by the ACCC earlier this year.
As of today, drought-affected dairy farmers across Australia will be able to apply for a grant from the Coles Dairy Drought Relief Fund. The size of the grants will be determined based on the number of applications received and amount of money raised until December 31.
Coles has appointed PwC as an independent auditor to oversee the application process.