Supermarket giant Woolworths has declared it will put an end to its bogglingly cheap $1-a-litre milk, signalling a ceasefire in a battle against main rival Coles that critics say has damaged the livelihoods of Australian dairy farmers.

In a statement, Woolies said it will pull $1-a-litre variants of its home brand milk from shelves tomorrow, eight years after their introduction. Two-litre and three-litre bottles will be sold for $2.20 and $3.30, respectively, with all proceeds from that extra price hike to be distributed to local dairy farmers.

The permanent price hike comes after the chain’s introduction of ‘Drought Relief’ milk in September 2018, which passed 10c per litre to farmers in areas impacted by severe weather conditions.

While that move was praised by industry leaders, there were calls to make the price hike permanent and to extend that funding initiative to farmers outside of drought-affected zones.

“This pricing practice is not viable and we urgently need a shared solution to assist in building the long-term sustainability of Australian dairy farmers,” Australian Dairy Farmers (ADF) president Terry Richardson said in October last year.

“Ultimately, we must push for a permanent end to discounted dairy products, whether it’s $1 per litre milk or cheap cheese.”

Woolworths and Coles were both accused of driving down the farm gate price of milk with their aggressive retail offerings, leading to reduced profits for Australian farmers.

In a statement today, ADF CEO David Inall said “removing $1 milk is not just intended to restore farmers’ financial confidence, but it will also boost confidence in regional communities and small businesses that rely on the industry.” 

Coles came under criticism last month after it was revealed that farmers were struggling to access funds raised by the chain’s milk.

Woolworths said its fund will face independent audits, and that the chain “will continue to consult and engage with dairy industry bodies” on how to dish out the financial assistance.

The ADF has called on Coles and fellow competitor ALDI to match Woolies’ commitment to a permanent price hike.

Source: Sydney Morning Herald
Image: Dave Hunt / AAP Image