Coles, ALDI call off milk price wars but the battle for long-term relief for farmers remains

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  • Coles and ALDI are charging an extra 10 cents per litre on their home brand milk.
  • Agriculture Minister welcomes the move and says farmers deserve a “fair reward for their effort”.
  • Supermarkets say the dairy industry needs structural reform.

Coles and Aldi have joined Woolworths in calling a ceasefire to the eight-year milk price war to help farmers through the drought after sustained public and political pressure.

Both supermarkets will increase the price of milk by 10 cents per litre. The proceeds will be passed on to farmers.

Agriculture Minister David Littleproud welcomed the decision as an “important first step.”

“It’s time farmers received a fair reward for their effort,” said Littleproud. “There people produce our food.”

The move brings Coles and ALDI into line with Woolworths, which made an identical move back in February after coming under fire from consumers, industry groups and the government.

Australian supermarkets have been engaged in a turf war with milk a key weapon in their bid to lure consumers from each other. The supermarkets have taken advantage of a global oversupply of milk that has pushed down the price.

The government and the supermarkets are still at loggerheads over the future of dairy industry. Coles and ALDI still claim the industry’s problems are “structural” and require reform led by the government.

Coles noted the struggles of dairy farmers in northern Victoria, New South Wales and Queensland as they battle the drought.

“We know that many dairy farmers cannot wait for structural reform to be delivered so we are moving to provide relief right now,” said Coles chief executive Steven Cain.

ALDI managing director of buying Oliver Bongardt echoed the same sentiment, acknowledging the severity of the drought, while emphasising government action is needed for long-term relief.

“Our decision to increase fresh milk prices has been reached in recognition of the significant issues currently impacting the dairy industry and the fact that broader government-led policy reform is unlikely to occur in the short-term,” Bongardt said.

Opposition Leader Bill Shorten has raised the prospect of re-regulating the dairy industry and putting a floor price on milk.

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