Coles has announced its biggest milk price hike in a decade, adding more pressure to family budgets.
Coles says "increases in sourcing, transportation and packaging costs, including a substantial rise in farmgate prices paid to dairy farmers" have caused the price rise.
It sources its milk directly from dairy farmers and also via dairy co-operative Norco, which supplies Coles Brand milk in northern NSW and southern Queensland. The rise comes after record prices were paid to farmers by dairy processors for the new financial year, with values at farm gate hitting $10 a litre of milk solids.Coles says the lift in retail prices is "in recognition of the higher costs being faced by dairy farmers" and the price it is paying farmers.
"This included an increase to the farmgate price paid by Coles this financial year, even for farmers with multi-year contracts already in place," a statement from the company reads.It comes as ASX-listed dairy processor Bega Cheese today issued a potential earnings downgrade to the stock exchange, citing a 30 per cent increase in the amount it was paying to dairy farmers after strong competition from other dairy companies for milk.
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