Supermarket milk war escalates as Coles add new supplier

A year after its decision to slash house brand milk prices to just $1 a litre, supermarket giant Coles has stepped up pressure on dairy suppliers by tying up an exclusive distribution deal with Warrnambool Cheese & Butter.
The president of the industry lobby group Australian Dairy Farmers, Chris Griffin, said farmers were being hurt by the price war.

“The generic brands are impacting on the processors' brands and sales because consumers are going for the cheaper option, so the profitability of the processors is impacted, and that's reflected in the prices they're prepared to pay farmers,” he said.

An ACCC investigation in July last year found that the retailers were absorbing the bulk of the discount, amid accusations that suppliers were feeling the pinch as a result of the intensifying supermarket price war which has expanded into other goods as well.

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