In a forthright press statement, the Co-operative says Parmalat recently won the contract to supply Woolworths’ house brand products. This contract was previously held by Lion (formerly National Foods), which sourced more than 110 million litres of milk from DFMC members to supply Woolworths.
DFMC chairman Ian Zandstra said: “DFMC suppliers are facing a 30% reduction in milk destined for supermarket shelves. However, our view is that this could be significantly improved if Parmalat decide to secure the milk they need at a competitive price from the NSW milk pool.”
Parmalat won the right to the Woolworths private label contract two months ago. This comes into effect in September, yet DFMC believes that Parmalat has secured very little milk from NSW suppliers to meet the 110 million litres required on an annual basis.
“It’s becoming increasingly more likely that NSW consumers who purchase their milk from Woolworths supermarkets will be drinking milk produced from Victorian dairymen,” said Mr Zandstra.
“By all accounts, DFMC’s suppliers are likely to experience first-hand the ‘knock them down’ price campaign by Woolworths, with 30% of all current milk production no longer needed by Lion due to movement of the private label contract from Lion to Parmalat,” said Zandstra.
“Milk for the NSW market should come from NSW dairy farmers. It’s crazy to think that milk tankers will be passing each other on the Hume Highway if Parmalat decides to source cheaper milk from Victoria in order to make a greater margin on the $1 per litre retail price point that’s being maintained by the major supermarkets.”
Source: Dairy Farmers Milk Co-operative
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