Supermarket's one good deed insults an industry it ruined
IT MAKES me angry to hear Woolworths praised for instituting the 10c milk levy and I think the company should hang its head in shame.
Sure Coles and Aldi are worse for failing to lift the price of milk, but Woolworths does not deserve a single shred of goodwill.
For the past seven years it was instrumental in driving down farm-gate prices and forcing farmers to abandon their dairies.
An extra 10c this late in the game will not fix the damage caused.
We are supposed to live in a free market economy, where value is based on supply and demand, but the big retailers have distorted this dynamic by setting an arbitrary price point for milk.
Drought cut into the Queensland dairy herd's lactating rate, but demand remained constant.
If this happened to any other commodity, prices would have increased. The price of beef hit a record two years ago and lamb is looking good. Grain and fodder are through the roof.
These higher prices bring some relief.
But milk is stagnant.
The big retailers know the damage they caused by holding on to dollar milk.
An average dairy farmer gets about 50c per litre while the processor - who pays for staff, freight and pasteurisation - gets about 49c per litre.
This means the supermarkets get a few cents a bottle.
They are happy to take a loss to get customer through the door, but they are not the ones who paid the price.
Our farmers have.
If Woolworths really wanted to help it would remove the price cap entirely.