Dairy farmers to supply direct to Woolworths

Tuesday, 02 April, 2013

Woolworths is trialling a direct relationship with a group of dairy farmers in the Manning Valley. The farmers are looking to strike a commercial agreement to supply milk directly to the retailer.

The farmers have lodged a collective bargaining notification with the Australian Competition and Consumer Commission (ACCC) to allow them to collectively bargain with the supermarket giant.

Woolworths says this will be the first time in Australia that a retailer has contracted farmers directly for drinking milk. It claims the arrangement will give dairy farmers a better deal for their milk and consumers a range of new milk products.

“We think this trial has the potential to provide a much better deal for farmers in the Manning Valley. Our aim is also to secure longer-term contracts which will give us the confidence to invest in our businesses for a sustainable future,” said Manning Valley dairy farmer Tim Bale.

Woolworths General Manager of Fresh Food Pat McEntee said that the trial of a direct relationship with farmers would benefit both farmers and consumers and could be a model that will enhance the long-term sustainability of the dairy sector.

“This trial will not be the silver bullet to fix all the problems but we think it could herald a new way of delivering better returns to farmers and a more efficient supply chain,” McEntee said.

“Over the last couple of years, our customers have expressed their concern about dairy farmers’ long-term future in this country. We have also taken on board the industry’s concerns about the negativity that has been attached to their commodity and we have looked for opportunities to improve this.”

Woolworths says it hopes to stock both homogenised and unhomogenised milk sourced directly from the Manning Valley farmers by the middle of the year. The milk will be marketed under a new brand that will be jointly developed by Woolworths and the farmers.

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