Milk exports hope puts paid to $1-a-litre price war

 In Australia, Coles, NewZealand, Woolworths
Agriculture Minister Barnaby Joyce has weighed into Coles and Woolworths’ $1-a-litre milk battle saying “what was a great trick for a few years will turn into a very bad business plan”.
Mr Joyce’s comments came after the Australian Competition and Consumer Commission launched action against Coles in May for its treatment of suppliers.
The ACCC alleged Coles forced smaller grocery suppliers to pay additional rebates to fund a new supply chain program. Coles has denied these claims.
Mr Joyce said he welcomed the ACCC action but said the dairy industry would eventually “sort itself out”. Coles and Woolworths slashed the price of milk to $2 for two litres four years ago, triggering the supermarket price wars that have led to strong discounting in a range of household staples, including bread, butter and eggs.
But Mr Joyce said “insurmountable demand” from Asia’s fast-growing middle class was threatening the supermarket duopoly’s business model.
He said in northern NSW alone 16,000 litres of milk a week was being flown to China, where it was fetching $7 to $12 a litre.  Sydney Morning Herald – Read more…

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