Monday, 1 June 2020: Woolworths will extend its existing dairy contribution payments on two and three litre fresh own brand milk varieties until June 2021.
The 10 cent per litre levy has contributed around $50m to dairy farmers since Woolworths first introduced the initiative in 2018. Based on current volumes, these support payments are expected to contribute an extra $30m to dairy farmers over the next 12 months.
The move to extend the support will provide certainty to more than 450 dairy farmers supplying milk used in the production of Woolworths branded milk as the Federal Government’s Mandatory Code of Conduct comes into full effect and drives change in the industry.
Woolworths will also establish a $5m fund to provide infrastructure and technology grants to dairy farmers to help improve on-farm efficiency and profitability over the next three years. Woolworths is engaging with dairy industry stakeholders on the design of the program and expects to open for applications later this year.
Woolworths Director of Fresh Food, Paul Harker said: “Our levy has provided much-needed relief to dairy farmers and we’re grateful for our customers’ support of the program.
“While conditions have improved and farmgate prices have gone up since we started the levy in 2018, we’re extending payments to provide certainty while dairy farmers and processors find their feet under the new mandatory code.
“This is set to return tens of millions to dairy farmers over the next 12 months above and beyond the farmgate price they’re paid by their processors.
“To build on our existing support, we’re also working to establish a dairy fund to offer financial grants for dairy farmers to invest in new infrastructure or technology to improve profitability.”
The Federal Government’s Mandatory Code of Conduct was one of the ACCC’s key recommendations following its inquiry into the dairy industry in 2018. It has been introduced to address what the ACCC determined was an imbalance in bargaining power between dairy processors and farmers.
From today, processors are required to publish their standard form milk supply agreements to cover all the circumstances in which they intend to purchase milk in the coming financial year.
Woolworths purchases milk directly from around 20 dairy farmers for its Farmers’ Own range and will today publish its agreements in line with the requirements of the code.
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