Supermarket milk price war to result in Queensland not supplying its own milk

Posted by AFN Staff Writers on 21st November 2012

Coles and Woolworths’ milk price war has driven many Queensland farmers out of the dairy industry according to a new Queensland industry report.  The report released today, suggests it is only a matter of time before Queensland’s milk supply is sourced from other Australian states.

The latest AgTrends report from the Queensland Government has confirmed the ongoing impact of the supermarket milk war and the on-farm impacts resulting from $1 per litre milk discounting led by major supermarket chains.

The report has confirmed that at least 50 farmers have left the industry since the price war started, as returns to dairy farmers drop further and milk production in Queensland is not meeting the demand for the State’s drinking milk needs. It is predicted that another 40 or so dairy farmers will have exited the industry by the end of 2012 due to the low returns.

Queensland Dairyfarmers’ Organisation President Brian Tessmann said the devastating impacts would not be news to dairy farmers, who were all too aware of the impacts.

“The bottom line is that the supermarket milk war is creating a real threat to Queensland’s milk supply and for our State to continue to supply itself with milk,” Mr Tessmann said.

“Retailing at $1 a litre is not a fair and sustainable price for fresh milk. It is having seriously negative impacts right through the supply chain to dairy farming families,” Mr Tessmann added.

Mr Tessmann said the Queensland Government report had confirmed that about half of the Queensland dairy farm population was unsure whether they would still be in the industry in the next five years if milk prices and farm financial returns do not improve.

“This would be a devastating outcome for the industry and Queensland milk consumers,” Mr Tessmann said.

The Queensland Dairyfarmers’ Organisation is pushing for government intervention and is supportive of food industry moves to introduce a mandatory code of practice and a supermarket ombudsman.


Coles and rival supermarket Woolworths have been blamed for Queensland dairy struggles.