NORTH EAST dairy farmers have welcomed a new deal between Murray Goulburn (MG) and Coles that will deliver fresh milk direct to supermarket shelves.
MG has struck a 10-year deal to process and supply Coles’ house-branded milk from July 1, next year.
As part of the deal MG will spend $120 million on two factories in Melbourne and Sydney to supply the supermarket giant’s stores, effectively cutting out the middle man.
MG said the Coles contract locks in a premium that will deliver additional profits to 2480 farmer supplier-shareholders from July 2014.
Greta dairy farmer Bill Tanner said something had to happen to improve returns to the farm gate and this was the reason farmers are with the co-op.
“If supermarkets are going to continue their $1 per litre pricing they need to make sure farmers are getting paid properly,” Mr Tanner said.
Springhurst farmer Lindsay Humphry, who has been in the industry for decades, said the 10-year contract will bring long-term gain.
He also said it is good for the Australian dairy industry as a whole.
“What we currently have is money going out of the country, with Lion and Parmalat shareholders reaping the dividends,” Mr Humphry said.
“Now MG is going all out to help the industry and doing all it can to promote it.”
United Dairyfarmers of Victoria (UDV) president, Kerry Callow, said dealing direct locks in a premium for the milk that dairy farmers desperately need.
“It’s also great to hear Coles has agreed to re-stock its shelves with Devondale-branded fresh milk and cheeses.
“From June this year, consumers will once again see these iconic Devondale cheese brands back on Coles’ shelves, after a nine-year absence.”
Ms Callow said it was heartening to see that Coles had listened to the UDV and Australian Dairy Farmers, who have campaigned for more than two years to try and get farmers a better deal in the fresh milk market.
“We’ve heard lots of arguments from processors and Coles claiming they’re not paying farmers any less,” Ms Callow said.
“Dealing direct means our nation’s largest dairy farmer co-operative finally gets a clear view of what Coles is paying – true transparency.”