When Coles lowered the price of its house brand milk to $1 a litre earlier this year and Woolworths quickly followed suit, there was much speculation that the move would either impact prices paid for farmers or found to be against competition rules. However, the ACCC (which we’re covering a lot today, I know) has found that to date, the $1 milk pricing doesn’t violate any relevant laws.
The ACCC’s investigation found that the bargain milk prices had an impact on Coles’ profits, rather than seeing the price paid to individual farmers reduced. That in itself isn’t illegal; keeping prices down in order to damage competitors is what would attract regulator interest.
It also found that prices paid for milk to farmers (the “farm gate price”) generally wasn’t lower for supermarket brands:
It is the case that some processors pay some farmers a lower farm gate price for milk sold as supermarket house brand milk. However on the evidence we’ve gathered over the last 6 months it seems most milk processors pay the same farm gate price to dairy farmers irrespective of whether it is intended to be sold as branded or house brand milk.
Have you embraced $1 a litre milk with fervour, or stuck with pricier brands or a guaranteed local supply? Tell us in the comments.