Coles milk pricing argument sours on social media

Posted by AFN Staff Writers on 7th February 2013

Coles has defended its position on its low-priced milk with the launch of a new video via Facebook and Twitter today.

The video aims to inform Coles customers of information that is “often overlooked” when reporting the ongoing debate between farmers and Coles over its low-priced milk.

According to Coles in its new video, only 25 per cent of all milk produced in Australia is used for Australian drinking, with the rest exported or used in the production of other dairy products. Further, 4 per cent of the 25 per cent of milk produced for Australian drinking becomes Coles brand milk.

Coles has said that while farmers claim that they are not receiving enough money from the low-priced milk, the store has also taken a “huge cut” in the profits they earn on each bottle sold – with dairy processing companies earning around the same price as they were two years ago when Coles first cut its milk prices.

However, the video has not had the intended effect on all Coles consumers with many taking to the company Facebook page to call them “spin doctors.”

“What is that 4% of figure??..homebrand products make up a much greater number than that..The other thing is why do you feel you need to promote this..Coles…Please be realistic..[sic]” one reader wrote on Coles’ Facebook page.

Coles then responded that it is “wrong to blame Coles” for “higher input costs, the high dollar, and the weaker export market” causing problems.

“As our video shows we do not buy milk directly from farmers and our drinking milk accounts for just 4% of total milk production in Australia. But despite this, we still wanted to make sure that farmers were protected so we fully absorbed the lower retail price by reducing our margin and paying processors more,” a Coles media spokesperson replied on the Facebook page.

Meanwhile, Coles Head of Communications Jon Church remains hopeful that Coles customers will be “interested to hear” the information.

“We know that lower retail prices have helped Australian families save money but we are often asked by customers what this means for Australian dairy farmers. So we wanted to provide clear information in a way which is engaging and easy to understand,” Mr Church said.

The social media campaign follows a Coles announcement earlier this year that “suppliers would benefit from the latest round of price cuts” as part of the ongoing “Down, Down” campaign.

An image from Coles new campaign to defend its milk prices.