Social media is full of pictures of empty fridge shelves at supermarkets, with the branded milk in short supply — but the consumer support could be short-lived, according to agribusiness analyst David McKinna.
«There’s always going to be a surge at the start, in the country and in the inner-city,» he said.
Dr McKinna said since the dollar a litre milk was introduced, specialty brands like A2 milk, and regional labels had sold well to «millennials» in capital cities, who also favoured free-range or organic products.
«But at the end of the day, consumers are battling and if you can save yourself $10 a week by buying [supermarket-label] milk, you will. It’s short-term and fairly marginal,» he said.
«There will be a lot of social media while it’s in the headlines, but I think then it will start to waver.»
With branded milk disappearing off the supermarket shelves, 20,000 Facebook users have shared a postquestioning whether supermarkets are «holding back other brands of milk until they sell theirs.»
Coles also issued a statement saying it was not holding back branded milk.
«Coles has not made any changes to the way we replenish our milk range,» a Coles spokesperson said.
«Our goal is to provide our customers with choice at prices they can trust. That’s why we sell a number of brands of milk across Australia.»
Supermarkets windfall from private label
Dr McKinna said Coles and Woolworths were guilty for their part in driving down the price of fresh milk, and forcing processors to cut their payments to farmers since 2011.
Coles’ offer to give 20 cents for every litre from a new milk brand to 2600 Victorian farmers in crisis, showed the supermarket chain was «on the back foot», Dr McKinna said.
«The $1 a litre milk has had an extraordinary impact on the dairy industry,» he said.
«I calculated it was transferring about $250 million a year from the dairy farmers and processors to consumers and supermarkets.
«It’s had a profound impact and it’s got to the stage where the viability of our food supply has been threatened in some areas.
«It’s not only in our dairy but also fruit and vegetables selling way below the cost of production and it’s simply not sustainable.
«So you can see why people are cynical about the 20 cent per litre rebate [by Coles]. It’s very small, when people are losing hundreds of thousands of dollars per farm.»
With McKinna’s calculation, 80 to 90 per cent of all fresh milk sold in supermarkets is their own private label, and the supermarkets have come to dominate the fresh milk space, selling 60 per cent of all fresh milk sales.
With farmers producing milk at below the cost of production, Dr McKinna said consumers need to be more aware of why they need to pay more for milk.
A Coles spokeswoman flatly rejected claims on social media that the supermarket had instructed staff to hold off selling branded milk until stocks of non-branded milk had sold.
«Coles has not made any changes to the way we replenish our milk range,» the spokeswoman said.
«Our goal is to provide our customers with choice at prices they can trust. That’s why we sell a number of brands of milk across Australia.«
Source: ABC