Coles won’t back 10 cent drought levy on its milk: Already delivered $11 million to drought

Coles supermarkets is refusing to increase its $1 a litre house-branded milk price by 10 cents a litre to help drought affected dairy farmers, despite reports its rival Woolworths is willing to back a 10 cent levy.

The Weekly Times asked: “Will Coles join Woolworths in putting a 10 cent levy on house-branded milk to fund drought support?”.

But Coles media department has refused to answer the question, simply stating the retailer was already doing its bit “contributing nearly $11 million to farmers and rural communities affected by drought.”

“Coles and our customers share the community concerns about the plight of farmers experiencing harsh drought conditions,” A Coles spokeswoman said.

“Last month we announced the Coles Nurture Fund would provide $5 million in grants and interest-free loans for farmers who have a project which will help them to combat drought.

“In addition, Coles is also raising money in stores across the country for the CWA’s drought relief efforts to provide more immediate assistance, and Coles is matching every donation dollar-for-dollar. So far, the funds donated by Coles and its customers exceeds $5.9 million, bringing our total contribution to nearly $11 million.

Federal Agriculture Minister David Littleproud said Woolworths had shown leadership on the issue and was on board as long as other retailers were too.

“Coles is more reluctant but I hope they’ll come on board,” Mr Littleproud said. “I intend to speak to ALDI and IGA/Metcash as well.”

He said the Department of Agriculture is currently investigating ways a temporary levy could be implemented.

“If retailers get to a point where they support a 10 cent levy on each litre of milk to go directly to farmers, I am happy to try and help to facilitate it as a temporary measure while structural reform happens in the industry.

“I support the principle of a temporary levy. We all know many of our farmers are really struggling right now.”

Queensland dairy farmers have led the charge for a “10 cent a litre drought levy”, registering a petition that has already gained 25,000 signatories.

Both Queensland Dairyfarmers’ Organisation and NSW lobby Dairy Connect see the levy as the first step in returning the milk price to sustainable levels, not just a one-off levy that is withdrawn once the drought ends.

“We know 10 cents is not enough for a sustainable dairy industry,” QDO spokeswoman Sarah Ferguson said.

“We intend to continue negotiations with the supermarkets on increasing the levy.”

NSW Dairy Connect chief executive Shaughn Morgan said the levy had to remain in place as a permanent price increase, with no backtracking after the drought.

“It should be looked at as continuing the sustainability of the industry,” Mr Morgan said.

Previous research based on Australian Bureau of Statistics inflation figures shows the supermarkets $1-a-litre cap on milk prices, which has been in place since 2000 has been disastrous for the dairy industry.

The cap has mean a litre of milk is worth less than half the real price it was selling for on the supermarket shelves in the year 2000.

Deflating today’s $1-a-litre milk to 2000 prices means millennial consumers would have paid just 65 cents for a litre of milk. At the time they were actually paying $1.40/litre.


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