Coles and milk prices
BY slashing its price for milk the supermarket giant, Coles, says it has increased consumption by 10 million litres a week.
And its merchandise manager, John Durkan, told this week's NFF national congress most of the cost of its controversial $1/litre milk had been borne by the supermarket and none by producers.
Mr Durkan's claims are hotly disputed by dairy industry farm leaders.
Coles' $1/litre milk pricing strategy has been the subject of ongoing protests by dairy farmers who claim the supermarket giant is destroying the dairy industry, particularly in Queensland and NSW.
Mr Durkan said the supermarket's "down, down" pricing policy on staple foods like bread, milk and meat was being driven by the demands of its 18 million customers.
They wanted cheaper prices, they wanted Australian-grown produce free of preservatives and additives and they wanted to know the origins of their food.
He said Coles would be happy to source all its fresh and packaged food from within Australia but some local products were simply too expensive or seasonally unavailable during part of the year.
After 35 years of uninterrupted food price inflation, retail prices had started to deflate in the past 18 months, he said.
Coles had invested $800 million into its program to lower prices in the past four years which had been partly covered by stripping costs out of its business.
The resulting increase in sales was helping farmers sell more produce. Mr Durkan said the supermarket's switch to hormone-free beef had slashed its number of suppliers from 75 down to four but he said the decision had improved meat quality.
The rising concerns among consumers about animal welfare was also driving the supermarket's policies on phasing out caged eggs and pork produced on farms using sow stalls.
Mr Durkan announced to the conference that Coles would stop selling pork, ham and bacon from pigs kept in stalls as well as company branded caged eggs from next January, a year earlier than promised.
Coles was the key sponsor of the congress which triggered some criticism but NFF president, Jock Laurie, said the federation needed to have open communication channels with the big supermarkets despite unhappiness with their pricing policies and hard bargaining with some suppliers in the bush.