Coles acts in response to feared shut down of WA dairy industry

Posted by AFN Staff Writers on 21st March 2013

Western Australian dairy farmers supplying beverage manufacturer Harvey Fresh will get a higher farm gate price for fresh milk supplied to supermarket giant Coles.

The higher farm gate price follows Coles’ discussions with agriculture and dairy sector representatives in the State about the future of Western Australia’s dairy industry.

Coles said it will absorb the higher cost price from its own margin so that consumers in Western Australia do not need to pay a higher price for milk at the supermarket.

Coles has responded by saying it will pay Harvey Fresh an extra 2.7 cents per litre for its branded and private label milk following the supermarket’s latest price review.

“The Coles price increase will allow Harvey Fresh to pay higher farm gate prices to its 70-plus milk producers in Western Australia,” said John Durkan, Coles Merchandise Director.

“Coles has now increased the price it pays to Harvey Fresh by 6 cents per litre in the last nine months to ensure that Western Australian dairy farmer suppliers are getting a better return at the farm gate,” said Mr Durkan.

“Research shows that our customers value the lower prices on product that they buy every day at Coles such as milk, but they also want farmers to be treated appropriately and we work closely with our supplier to ensure this occurs,” said Mr Durkan.

Harvey Fresh, a privately-owned company that also produces freshly-squeezed fruit juices and wine, began selling milk to Coles in October 2011. Australian Food News reported in February 2012, that the Company had acquired juice processor Nugan Quality Foods and had plans to capitlise on export markets for juice in South-East Asia.

The latest milk sales figures from national dairy industry body Dairy Australia show that all Australian States have reported an increase in milk sales this year, with Western Australia showing an increase of 2.5 per cent on a year-to-date basis compared with the 2011/2012 financial year.