WA dairy farmers wary of Coles’ Eastern States milk scheme
Coles’ decision to buy milk direct from Eastern States dairy farmers in a bid to improve farmgate prices has been savaged as “smoke and mirrors” by WA farmers, who say it will only benefit big producers.
The grocery juggernaut is set to start sourcing milk for its branded fresh milk products directly from farmers in Victoria and New South Wales next month.
Coles chief operating officer Greg Davis championed the buying model as key to shoring up the dairy sector’s sustainability.
Mr Davis said the model had been successfully applied to seafood and fresh produce industries, and he expected it to work for dairy farmers.
He has not ruled out extending it to milk-producing regions in other States.
However, Cowaramup dairy farmer Bob Biddulph said he was not confident it would improve the embattled industry’s pricing woes if it was implemented in WA.
“I don’t agree with it at all because it will only benefit the major farmers,” he said.
Victorian and southern and central New South Wales dairy farmers will be offered long-term supply contracts by Coles, ranging from one year to three years, through the new milk-sourcing model.
Canadian-owned processing company Saputo will process and bottle milk through a toll-processing agreement.
Capel dairy farmer Mike Norton also said he was sceptical about Coles’ milk buying proposal and feared it would hurt the State’s smaller suppliers, if implemented in WA.
“I doubt it will do a lot to bolster confidence in the dairy industry, unfortunately,” he said.
The milk sourcing announcement follows Coles’ decision to join Woolworths and end its controversial $1-a-litre milk deal in March to raise the price of its branded milk by 10¢.
Under the new sourcing scheme, Coles Brand fresh milk will remain in refrigerators at $1.10-a-litre.
Coles declined to respond to the WA dairy farmers’ concerns when contacted by Countryman.
Nationals Farmers’ Federation chief executive Tony Mahar last week threw his support behind the pricing model.
The Australian Competition and Consumer Commission-led probe into the nation’s dairy sector, released last year, found there was no evidence that supermarket pricing had “a direct impact on farmgate prices”.
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