Coles says it is receiving a steady stream of applications from dairy farmers for a share of its contentious 10 cents a litre drought levy on the retailer’s three-litre house brand milk sales.
The supermarket, rocked by stinging criticism of its “hollow” drought fund raising efforts, has also teamed up with northern NSW and southern Queensland farmer-owned dairy processor, Norco, which will assist its co-operative members to apply for funding through the Coles Drought Relief Fund.
“We look forward to working with them,” a statement from the retailer said.
A 10c/litre levy on all fresh milk would cost Australian consumers $250 million a year - a cost that would fall disproportionately on the 40 per cent of households who have only $150 a week to spend on their grocery shop.
- Coles statement
However, the company dismissed dairy industry calls for the 10 cents/litre price increase to be extended to all white milk products in its dairy cabinets, arguing shoppers can’t afford the cost.
“Based on data from Dairy Australia, a 10c/litre levy on all fresh milk would cost Australian consumers $250 million a year,” Coles said.
“That’s a cost that would fall disproportionately on the 40 per cent of households who have only $150 a week to spend on their weekly grocery shop.”
Aldi also insisted it was working directly with its suppliers to help ease their drought pricing pressures, but was not passing on to customers any price increases it paid to dairy farmers.
“Without a transparent, auditable and equitable process for funds collection and distribution, we believe that it would be irresponsible of Aldi to tax consumers on the purchase of milk,” an Aldi spokesman said.
The retailers’ comments follow Agriculture Minister David Littleproud again attacking Coles and Aldi this week over their responses to his earlier criticism of their handling of drought relief efforts.
Mr Littleproud yesterday called out Coles for its “milk levy” which would not go back (at 10c/litre) to those farmers who supply it – “because Coles doesn’t even know which farmers supply it milk; it deals with a milk processor instead”.
He also criticised German retailer Aldi, “which sells very cheap milk” for not participating in any kind of dairy pricing reform, calling it a “one finger salute” to Australian dairy farmers.
Coles responded saying it guaranteed 100 per cent of the money raised in the three months to January via its three litre milk sales would go to dairy farmers coping with drought – regardless of their location, or the processor they sell their milk to.
“Coles, together with our customers, has already committed more than $12 million to assist drought affected farmers in all sectors across Australia, and until the end of the year we will be raising money for dairy farmers affected by drought through a 30c increase on the price of our three-litre own brand milk across Australia,” the company statement said.
“The distribution of all funds will be independently audited by PwC.
“As we have for the past 10 years, Coles remains committed to helping Australian families with the cost of everyday living, by delivering great value on the items they buy most often.”
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But Mr Littleproud branded Coles’ drought offer to dairy farmers as a media stunt.
“Coles’ first lazy idea was to just give money to the NFF and hope they’d sort it out – which didn’t happen,” he said.
Farmers want fair trade, not aid.
- David Littleproud, federal Agriculture Minister
“I’m well aware Coles has an ‘independent’ person who will look at the grant applications from farmers, but Coles is still forcing farmers to apply for grants which farmers will see as welfare.
“Farmers want fair trade, not aid.
“I couldn’t give a rats if Coles wants to criticise me for calling out their media stunt – they make millions of dollars a year from farmers and if I have to go to the media to call out their slippery corporate behaviour then bad luck.
“If I were Coles, or Aldi for that matter, I would not be baiting farmers to go to media by telling everyone how great I am to farmers.
“Dairy farmers are telling me a mandatory code of conduct for processors and farmers is a good thing – but the supermarkets need oversight too.
“The Australian consumer also has the power here – they can make change with their wallets.
“They can buy branded milk, preferably from an independent, and put a fairer return back in farmers’ pockets.”
NSW Farmers’ Association backed Mr Littleproud’s comments, agreeing Coles’ drought levy was a media stunt and it would not deliver the increased funds dairy farmers needed.
“The Coles drought levy on their three-litre private brand milk is a marketing ploy designed to keep the discounting of dairy products into the future,” said NSW Farmers dairy committee chair, Erika Chesworth, Dubbo.
“It will not enhance the sustainability of the dairy industry.
“For years the actions of retailers have eroded the value of the NSW dairy industry and it is offensive that farmers need to apply to access these funds.
“The Coles drought program is not genuine.”
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