Thursday, 25 October 2018 12:55

Milk levy plan turns sour

Written by  Sudesh Kissun
Australian Agriculture Minister David Littleproud. Australian Agriculture Minister David Littleproud.

Moves by an Australian supermarket chain to introduce a milk levy to help drought-stricken farmers has backfired.

Australia’s Agriculture Minister David Littleproud last week launched a scathing attack on Coles, one of the two main Australian supermarket chains.

He blasted Coles over its handling of the A10c milk levy for drought relief, calling its approach “slippery” and saying the extra money may not even go back to the right farmers.

Littleproud also had harsh words for the German supermarket chain Aldi, which operates about 400 stores in Australia. He says Aldi has refused to apply any levy and has done “bugger all” to help Australian farmers.

Coles and its main rival Woolworths last month announced a milk levy after weeks of intense lobbying by the dairy industry and the public. 

But the two supermarkets chose different systems to redistribute the levy to farmers.

Woolworths is offering customers in Queensland, New South Wales and ACT its in-house brand at A$2.20 for 2L and A$3.30 for 3L. It is passing the extra money to the milk processors, who have agreed to distribute the money to dairy farmers in full.

Coles increased only the price of its 3L milk -- from A$3 to A$3.30. It says that after discussions with the National Farmers Federation (NFF), it has set up the Dairy Drought Relief Fund and farmers can apply for funding.

But Minister Littleproud and dairy farmers are unhappy. Although he wanted to give Coles the benefit of the doubt he has now concluded it is an “empty media stunt”.

“The reality is [the 3L milk] is a very narrow portion of their range that sells,” he says. “[And they’ve compounded this by making] a bureaucracy for getting that A10c/L back to the farmer.” 

Littleproud says a better model is to give the levy funds back to the milk processors who collect the milk from farmers.

“The processors are the ones who actually pick up the milk; they’re the ones who know where the milk comes from,” he says.

He says Coles’ model provides no guarantee the money collected would go to the particular farmers who supplied the milk, or that they would be paid according to the volume of milk they supplied.

“Coles never wanted to make sure farmers got fairer pay, and made a hasty announcement to match their competitor,” he says.

The milk levy has also angered some dairy farmer organisations: the Queensland Dairy Farmers Organisation is unimpressed, with its president Brian Tessmann saying Coles’ publicity stunt in putting the A10c levy on a single line of their private-label milk is a slap in the face for farmers. 

“Because they have not put the levy on all brands and all sizes, the amount that would come back would be a fraction of a cent. 

“That’s bad enough, but worse is their announcement that they would deliver the pittance that would be collected back through the NFF as opposed to using the correct protocol which would be to pay it directly to their suppliers Norco and Saputo who would then be able to simply pass it on to members by way of their milk cheque.”

» Connect with Rural News

More like this

Growers urged to keep track of ‘messy middle’

New Zealand and Australia have done “wonderful work” in their produce industries. 

But after it leaves the farm or orchard it can get into the “messy middle”, says Gary Loh, a Singapore blockchain entrepreneur.

» The RNG Weather Report


Making it OK to ask for help

Meat processing company Alliance has started an employee support programme aimed at getting colleagues to look after each other and keep an eye out for possible mental health issues.


Johnstone bows out on top

When Lachie Johnstone first started on the board of Farmlands 19 years ago the rural services cooperative ran 32 stores with a turnover of $280 million.

‘Useful’ recruitment tool

Employers say a Government-backed free website, Work the Seasons, is becoming a useful part of their seasonal recruitment toolbox.

» Connect with Rural News

» Connect with Rural News

» The RNG Weather Report

» Latest Print Issues Online

The Hound

Logging spin

OPINION: The Hound notes that the foreign-owned and controlled NZ forestry industry is starting to feel the pressure of the…

EU waste

OPINION: This old mutt was interested to read a recent New York Times expose of the European Union’s agriculture subsidy…

» Connect with Rural News