A concerned consumer’s post on Coles’ Facebook page about the impact of its price cuts on farmers has gained more than 73 000 “likes” over three days, but the supermarket giant is yet to respond, despite constant declarations that customers and farmers are its main priorities.
On Friday, Jane Burney posted a heartfelt summary of the supermarket price wars effects on ordinary Australians.
Your $1 per litre of milk deal is killing the lifeblood of our dairy industry. The ramifications of it are finally rearing their ugly head. Dairy Farmers has announced it's price for Tier 2 milk at 13 cents per litre. This is not sustainable in an industry where costs of production can be as high as 30 cents per litre. The consumer is paying $1 a litre and the only winner here is the supermarket. It is time for us to go back to the old fashioned way; in which we bought real milk that tastes like milk; no permeate and where our fruit and vegetables were grown in our beautiful country. Stocking garlic from China, Argentina. What is going on? Obviously it is cheaper to buy it from overseas then from our country; grown in God knows what. And for our farmers and the towns they support and encourage capital growth; it is heartbreaking. Your latest ad campaign sprouting that you support Aussie growers in insulting. You are misleading the public in how you support Aussie growers. Not only have you ruined the fresh milk market but you have also lowered the price on your cheese and butter. The only winner here is you. Eventually all the Aussie growers you so called support will be out of business. Dairy farmers who work 7 days a week, 14 hours a day, who have been dairy farming their whole life, whose cows are their whole life will have to stop farming as it is no longer economically viable to continue. Our "fresh"produce will be flown in. The consumer will be stuck buying expensive, overseas produce. What will happen to our economy and our country towns? I urge people to think about what they buy. The more Australian made produce we buy, the more our money stays here and benefits us. Your $1 milk is a nail in an already suffering coffin. I am ashamed to watch you ads and us farmers burn in resentment when we do so.”
Over 4 500 people have commented, supporting Burney’s position about Coles’ decisions, and more than 73 000 have “liked” the post.
But just like its other notable social media fail earlier this year, Coles has failed to respond to the outpouring of support for Aussie farmers and disdain for the supermarket giants actions.
Not the first social media fail for Coles
In March, the supermarket giant copped criticism from consumers, who insisted it stop ripping off farmers and profiting from pokie machines.
"Finish this sentence: In my house it's a crime not to buy…” it wrote, and finish they did.
One responded with “In my house it’s not a crime to buy BREAD AND MILK AT PRICES THAT ALLOW PRIMARY PRODUCERS TO SURVIVE,” while others shared similar concerns about farmers and Australian workers.
The impact of $1 milk
After Coles cut its retail milk price to $1 a litre in January 2010, the flow-on effects of the decision have continued to damage the sector.
“In NSW, my state, I see farmers being asked to sign contracts for three cents a litre than their previous contracts,” Terry Toohey, Australian Dairy Farmers Director said at the Food Magazine Leaders Summit.
“This will have astronomical effects on fund and profit margins.”
"In my case I'll have 40 per cent of my tier 2 of milk [purchased] at 18 cents [per litre].
"The cost of producing it is 40 cents [per litre].
"So, you start to look and say, I'm only one person, there are 800 dairy farmers in NSW alone."
The current practice is for milk companies to announce what is known as an Anticipated Full Demand (AFD) to Dairy Farmers Milk Cooperative (DFMC), which is bought at a somewhat reasonable price and referred to as Tier 1 milk.
Any milk deemed ‘surplus’ is then paid at a much lower price and referred to as Tier 2 milk.
However, the buyers of the milk produced on Australian farms are deliberately underestimating the amount of milk that each can deliver, meaning they are not obligated to buy a considerable portion of the milk they know a farm will produce at the reasonable price.
There is no transparency at farmer level as to what Tier 2 milk is being sold to other processors for.
"The retail actions are certainly impacting the dairy farmers in a negative way, this combined with the uncertainties and other factors [impacting] dairy or other farming, it's making it unattractive for the next generation, because it's not profitable for my children,” Toohey said.
"If I was old and had children ready to take over the farm, I will tell them blue in the face not to come into agriculture.
“And that's pretty sad after 107 years on the one farm."
And as farmers leave family farms because they can’t make enough money to survive and Australian food manufacturers continue to go bust because they can’t meet supermarket expectations, Coles recorded a three per cent growth in sales on Friday.
Update: Coles contacted Food Magazine this afternoon to inform us that they did, in fact, respond to the comment posted on Friday afternoon, at 7am this morning.
The supermarket giant did not actually respond to the original comment, but rather one of the many Facebook users who have re-posted the original comment.
They said: “Hi Brent, we are committed to paying a fair price for our milk and actually increased the prices we paid to processors before we cut fresh milk prices in store last Australia day. This meant that processors did not have to reduce the price they pay to farmers. Helping Australian families buy more Australian milk is good for the dairy industry. We also have to disagree about importing fresh produce because we only import when products are not available in Australia. We call this our “Australia First” policy and it means that 100 per cent of our fresh meat, all our milk and 96 per cent of our fresh fruit and vegetables are grown right here at home. Why not take a look next time you are in store.”
What do you make of Coles' comments? Do you agree with the original comment posted on Facebook?