Coles launches new private-label to support farmers

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Coles has announced the launch of a more expensive private-label milk, aiming to support struggling Australian dairy farmers.

The move comes in response to cuts in the farm gate price paid by Australian processor Murray Goulburn, a cooperative of around 2,600 farms in NSW and Victoria, and New Zealand firm Fonterra. The price cut is unrelated to Coles’ private-label $1 milk offering.

The price cuts to dairy farmers come in the wake of a fall in the international commodity price of milk, which has seen Murray Goulburn drop its retrospective seasonal prices from $5.60 per kg of milk solids to between $4.75 and $5 at the end of April.

Coles Managing Director John Durkan told ABC Radio Rural that 20¢ a litre from its new milk would be used to establish a farmers’ fund to assist the dairy farmers affected by Murray Goulburn’s price cut. Coles would give $1 million directly to the fund.

“This sudden change, I’m sure, would have brought difficulty,” he said. “We want to help in any way we can.”

The company had previously set up a similar dairy farmers’ fund and private-label offerings in South Australia, with donations going towards education and development to assist the industry long term.

Mr Durkan emphasised that its supplier agreement with Murray Goulburn, established in 2014, would remain strong and added that, despite allegations suggesting otherwise, Coles would continue to support branded, as well as private-label, milk.

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