Coles milk price increase: ‘Disaster waiting to happen’: Dairy farmer’s warning over supermarket milk prices

Coles’ decision to increase the price of its private label milk appeared to be good news for the company Australian dairy farmers

Representatives of the dairy industry have made a plea for the large supermarkets earlier this month to raise their prices to support the sector’s increased production costs.

But Joe Bradley, director of eastAUSmilk, tells the story nine.com.au Coles’ recent price increase doesn’t go far enough.

Instead, he appeals to the large supermarkets to reduce their profit margins on dairy products because they say it is the only way to truly help the dairy industry and keep prices low for Australian shoppers.

“If they were to reduce their margins, if they were to go [for] 30 per cent instead of 40 per cent on dairy, which would allow processors to pay farmers more, and it would also help consumers,” Bradley told nine.com.au.

“I bet when we get to the financial year and you look at the profits of the supermarkets… their profits haven’t fallen.”

While Coles announced across-the-board price increases for its private label milk this week, Woolworths and Aldi are yet to follow suit.

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“We continue to monitor the situation and work closely with our suppliers to deliver the best value and highest quality products to Australian shoppers,” an Aldi spokesperson told nine.com.au.

“It is always our ambition to keep prices as low as possible while maintaining an honest relationship with our suppliers.”

Woolworths has been contacted for comment

The end of ‘cheap’ milk

Coles has increased the price of its own brand milk by 20 cents for one litre, 35 cents for two liters and 50 cents for three litres.

“I’m happy with it, but it’s not nearly far enough,” Bradley said.

‘We say that the minimum price for milk should be at least two dollars per liter. If you reduce margins, everyone can get something.

“Now we only get 5 cents, but the costs have increased. I have spoken to a number of farmers and our costs have increased by at least 15 cents per liter, sometimes even more.

“We need 15 cents to stay viable.”

Coles and Woolworths will report their latest financial results next month, and there is speculation that the major supermarkets will report a profit spike.

This is due to a combination of reasons, including higher food prices and Australian shoppers eating out less and dining in more as cost of living pressures continue.

These results will come at a difficult time for the major supermarkets as both are embroiled in legal action that the ACCC will take against them over alleged misleading sales techniques.

Both Coles and Woolworths deny these allegations

Who should pay for the rising costs of milk production?

Australian grocery prices have risen more than 20 percent in four years, and 2026 has proven particularly brutal due to the added pressure of fuel shortages caused by the conflict in Iran, and subsequent increases in grocery production costs and transport across the board.

Australian shoppers have become accustomed to dramatically increased supermarket prices and are scrambling to make ends meet.

However, there is only so much they can do as supermarkets seemingly pass these higher costs on to their customers without taking a hit themselves.

Milk is just one example of this. The price of meat, chocolate and coffee has also soared, with shoppers seemingly bearing the brunt of these unprecedented price increases.

“I’ve been saying it for a long time… when the supermarkets reduce their margins [for dairy]everyone would get a fair chance,” Bradley said.

The real solution for farmers and customers

From April 2026, Coles has announced a temporary support package for contracted Australian dairy farmers to help with rising production costs, including a payment equivalent to approximately 5 cents per litre.

Woolworths will pay an extra 10 cents per liter to about twenty dairy farmers who supply their Farmers’ Own milk.

Bradley explained that these incentives don’t start until May 1, “and that means we won’t get our milk check until mid-June.”

He also explained that these higher payments will only go to Coles and Woolworths milk suppliers, leaving the rest of the sector without similar help.

“What about the other 4,000 dairy farmers in Australia?”

Bradley said these payments won’t start until May 1, so the money won’t reach farmers’ pockets until “mid-June.”

Fuel costs have doubled, the price of fertilizer has tripled and “anything related to parts, anything related to plastic has also increased because of fuel costs.”

“I don’t think there’s ever been a case in my life where every dairy farmer in Australia is under stress,” he said.

“You’ve had catastrophes where you could have had a flood in a certain area or a drought in a certain area.”

In contrast, these higher production costs affect “every dairy farmer in Australia”.

This has led to a “minimum five percent drop in production this year,” which will only drive up milk prices further, Bradley warns.

“I would have to say this has been the biggest threat to dairy farming in this country,” he said.

“Why should the supermarkets get almost as much as the farmer? That’s insane. It defies all credibility.

“If they did that, they could give it back to the farmers and also help the consumer, and then we would guarantee fresh dairy in this country.

“The way they’re going about it right now, it’s a disaster waiting to happen, it really is.”

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