Discount milk at Coles Express a “shallow marketing tactic”

Friday, 11 January, 2013

Coles’ move to offer discount fresh milk at its Coles Express stores has angered Queensland dairy farmers, who say the supermarket giant has learnt nothing from the supermarket price wars.

President of the Queensland Dairyfarmers’ Organisation Brian Tessmann called the move “a shallow marketing tactic” and one that will continue to wreak havoc on fresh milk-oriented dairying states like Queensland.

“Since Australia Day 2011 when the ruthless milk discounting began, we’ve lost more than 55 farmers from the Queensland industry and the impact on farmers’ profitability is clear in terms of reduced farm-gate returns,” Tessmann said.

“The result has been that Queensland has been short of milk at times of the year, with $1/litre milk simply not giving a fair return to dairy farmers and other parts of the supply chain.

“Dairy farmers would strongly dispute any claims from Coles that it could sustainably price milk at a $1/litre, given the costs involved in producing, processing, transport and distribution. Dairy farmers see that the market has failed and this is yet another urgent example for the ACCC to investigate predatory pricing.”

Tessmann called the supermarket price wars “a lose-lose situation all round, and another clear example of the need for the federal government to work with industry on establishing a code of conduct and a supermarket ombudsman to address the extreme pressures of the industry”.

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