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Aldi and Franklins join Coles and Woolworths in milk price war

Coles and Woolworths’ milk price war, with ‘home brand’ milk varieties from both supermarkets being sold for $1 per litre as a loss leader will decimate small retailers and hurt farmers with Aldi and Franklins supermarkets also joining the war, with both lowering their milk prices to match.

The Australian Dairy Farmers (ADF) is calling on Wesfarmers’ (The owner of Coles supermarkets) shareholders to sign up to a resolution calling for a extraordinary general meeting of the company to explain the price cuts to Coles milk, butter and cream.

ADF Vice President Chris Griffin said Wesfarmers started out as cooperative.

“It was built up by farmers for farmers.‟

“We are calling on dairy farmers and their families, owners of corner stores, truck drivers who carry milk, butter and cream, fodder suppliers and consumers to support the resolution to help protect their industry.”

Small independent convenience retailers and franchise owners of brands such as IGA and Foodworks will be feeling the pinch on milk prices, with Coles and Woolworths using their market clout to drive down the price of milk and rivals Aldi and Franklins joining suit in making a loss on the product in order to attract customers away from small retailers.

Liberal and National MPs have called on the Australian Competition and Consumer Commission (ACCC) to investigate Coles and Woolworths milk price war.

South Australian independent senator Nick Xenophon was skeptical of the social good the duopoly of Coles and Woolworths was giving Australia in comments to the Australian.

“I understand that consumers want cheap milk,” he said. “But if cheap milk in the short-term means the destruction of our dairy industry in the long-term, ultimately consumers will suffer.” he told The Australian.

Labor party Senator and Federal Agriculture Minister Joe Ludwig has rejected calls for an ACCC investigation into the Coles milk price war, claiming he has received assurances from the retailer that dairy farmers continue to be paid the same for their produce.

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David Olsen

David Olsen

An undercover economist and a not so undercover geek. Politics, business and psychology nerd and anti-bandwagon jumper. Can be found on Twitter: <a href="http://www.twitter.com/DDsD">David Olsen - DDsD</a>

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