Coles and Woolworths have raised the retail price of its home brand fresh and UHT white milk products.
A Coles spokesman said the increase followed recent increases in sourcing, transportation and packaging costs, including a substantial jump in farmgate milk prices.
Coles is believed to be paying an average of $9.15/kg of milk solids, under exclusive supply agreements.
Shelf prices will go up by the following amounts:
. Coles Brand fresh white milk 1L was $1.35 now $1.60
. Coles Brand fresh white milk 2L was $2.60 now $3.10
. Coles Brand fresh white milk 3L was $3.90 now $4.50
. Coles Brand UHT white milk 1L was $1.35 now $1.60
A Woolworths spokesman said farmgate prices paid to dairy farmers have risen significantly this season, and as a result the company was paying its own brand suppliers more for milk.
"Across the dairy cabinet, brands have already increased their retail prices to reflect higher wholesale costs across the entire industry," the spokesman said.
We've now adjusted the price of our own Woolworths brand milk to reflect these higher costs as well.
We remain focussed on delivering value for customers across their shop and have frozen the price of 200 essential household products until the end of the year to provide certainty for our customers.
Woolworths milk will sell for the following prices from July 15
1L Woolworths branded milk - $1.60
2L Woolworths branded milk - $3.10
3L Woolworths branded milk - $4.50
In June, Coles signed updated contracts with 100 Australian dairy farms to supply milk directly for Coles Brand.
"In recognition of the higher costs being faced by dairy farmers, this included an increase to the farmgate price paid by Coles this financial year even for farmers with multi-year contracts already in place," the spokesman said.
Coles has been paying these higher prices since July 1.
"In recent months Coles has also agreed significant increases to wholesale prices in markets where Coles Brand milk is sourced from processors, as the farmgate price they pay to dairy farmers has also risen substantially.
Norco, NSW, dairy co-operative chief executive Michael Hampson said the increased farmgate price was making a huge difference to dairy farmers. '
"Through our long-term partnership with Coles, we have been able to support our 300 farmer members with a record farm gate milk price increase across the total 200 million litres," Mr Hampson said.
"This is especially important as farmers face pressures from rising costs of production, with many still recovering from the devastating impacts of recent unprecedented weather events."
Pirron Yallock dairy farmers John and Anne Boyd have been supplying Coles directly since 2019 and have a contract in place to June 2025
"We appreciate the stability a three-year direct supply agreement gives us, to enable constant investment to produce the best quality milk we can," they said.
"As we see it, it's a win-win for all.
"Coles support us and we support them, then by buying Coles Milk consumers can support the farmer to produce high quality milk they can enjoy," Mr Boyd said.
Coles Chief Commercial Officer Leah Weckert said the company knew customers were facing increased cost of living pressures.
"Raising prices is never something we do lightly, however the increased supply chain costs we are seeing, including higher payments to dairy farmers and processors, have necessitated these increases on Coles Brand milk products," Ms Weckert said.
"The feedback we've received from farmers and processors following the recent increases in farmgate and wholesale prices has been very positive, and we hope customers will help us continue to support them by purchasing their great quality Australian milk."
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