National News

Minister calls for boycott over cheap milk

The federal agriculture minister has savaged Coles and Aldi for retaining their cut-price milk lines and urged customers to boycott them.

David Littleproud has accused Coles of pretending to be a decent corporate citizen and Aldi of "hiding under the stairs" after they failed to follow Woolworths and stop selling milk at $1 a litre.

Dairy farmers struggling with drought need an end to Australia's "$1 milk disaster", he said, a price war that began eight years ago and has been blamed for sending some farmers to the wall.

"Publicity stunts like (Coles) asking shoppers to donate at the counter to help struggling farmers are just a smokescreen to hide the fact they pay bugger all for milk," Mr Littleproud said.

"The farmers wouldn't need donations from the public if Coles and Aldi paid fair prices."

On Tuesday, Coles said it would not axe its $1-a-litre Coles-branded milk, citing cost of living pressures on customers.

It said it would look for other ways to help farmers, including collecting customer donations and matching them dollar for dollar from next week.

It also pointed out it had committed $16 million over the past six months to support dairy farmers, and promised to continue liaising with the industry and the Australian Competition and Consumer Commission (ACCC).

But the minister said Coles had been saying that since August.

"So now it's time to put up or shut up. Act like a decent corporate citizen instead of just pretending to," Mr Littleproud said.

On Tuesday, Aldi said low prices were a core promise to its customers, and it did not support retailer-lead initiatives seeking to bypass the normal supply chain.

It said it supported the dairy industry by accepting price increases that reflect difficult market conditions.

It sourced its milk from processors, not farmers and expected processors to pay primary producers a sustainable price.

Farmgate prices to farmers depend on milk fat and protein content, and agreements with processors that vary from state to state.

But the average, according to the Dairy Australia website, was about 46 cents per litre at the farm gate in 2017/18.

Mr Littleproud said Australians should send a message with their wallets, and switch their business away from Coles and Aldi.

Dairy Connect, an advocacy group for dairy industry players, echoed that call, saying consumers can help force Coles and Aldi to change their ways.

"Shareholders ought to be ashamed at the way Coles has conducted itself," Graham Forbes, a NSW dairy farmer and Dairy Connect farmers' group president, said.

"And Aldi are very hard-nosed. If they don't change their mind they'll be dealing with processors with no milk."

Woolworths stopped selling its home-brand milk at $1 a litre on Tuesday, upping the price by 10 cents with the extra money to go back to farmers.

© AAP 2019