Woolworths has removed $1-per-litre fresh milk from sale to aid what it describes as the dairy industry’s “long-term sustainability”.
The supermarket is selling two and three litre varieties of Woolworths-branded fresh milk for $2.20 and $3.30, respectively.
“Every cent of the increase will end up with Australian dairy farmers,” Woolworths said in a statement.
The company claims the nationwide price change will deliver higher milk prices to more than 450 Australian dairy farmers who supply Woolworths-branded fresh milk.
‘Extremely tough for dairy farmers’
Woolworths Group CEO Brad Banducci said: “We believe the long-term sustainability of our dairy industry, and the regional communities they help support, is incredibly important to Australia.
“We’ve heard the outlook will continue to be extremely tough for dairy farmers right across the country.
“This is affecting milk production and farm viability, which is devastating for farmers and the regional communities in which they live. It’s clear something needs to change.
“The Drought Relief Milk payment model has worked on the eastern seaboard. It’s the most effective way to guarantee price increases end up in the pockets of Australian dairy farmers.
“While we’re realistic this won’t solve broader structural issues, we hope it will help inject much-needed confidence into the sector.”
Australian Dairy Farmers CEO David Inall described Woolworths’ move as a “game changer”. He also claimed discount dairy had long “frustrated” the industry.
“It’s reassuring that Woolworths has committed to delivering the full 10c increase back to those farmers,” he said.
“Removing $1 milk is not just intended to restore farmers’ financial confidence. But it will also boost confidence in regional communities and small businesses that rely on the industry.
“Consumers can buy fresh milk from Woolworths knowing they’re supporting the Australian farmers who supplied it.”
Customers in the equation
Mr Banducci said Woolworths had also considered customers when it made the decision.
“We’re acutely aware of the budgetary pressures facing many of our customers and have not taken this decision lightly,” he said.
“We believe it’s the right thing to do and a key step in shoring up fresh milk production in Australia. We’ll continue to work very hard to offer great value to our customers across their total shop.”