A trial to give dairy farmers a better deal and customers a range of new milk
products is one step closer with Woolworths and a group of farmers from the Manning Valley in
New South Wales confirming they are looking to strike a direct commercial agreement.
The farmers lodged a collective bargaining notification with the Australian Competition and Consumer
Commission (ACCC) late last week to allow them to collectively bargain with Woolworths. An answer from the
regulator could be expected within two weeks.
A successful notification will give the farmers immunity for collective bargaining to negotiate a landmark deal
with Woolworths that will allow them to trial the supply of milk directly to the retailer in what will be an
Australian supermarket first.
Woolworths wants to stock homogenised and unhomogenised milk sourced directly from the Manning Valley
farmers in stores in New South Wales by the middle of the year. Under the trial, the milk will be marketed
under a new brand that will be jointly developed by the farmers and Woolworths.
Woolworths has had direct relationships with meat and fresh produce farmers for more than 20 years and
today most of these products are sourced directly from the producer. However, this will be the first time an
Australian retailer has contracted farmers directly for drinking milk.
The trial of a direct relationship is seeking to give dairy farmers a better deal for their milk, end-to-end
transparency from shed to shelf, the certainty of a longer term contract and a closer relationship to their
consumers.
Manning Valley dairy farmer, Tim Bale, said: “We think this trial has the potential to provide a much better
deal for farmers in the Manning Valley. Our aim is also to secure longer term contracts which will give us the
confidence to invest in our businesses for a sustainable future.
“There’s no doubt that consumers like $1 milk but we think they also recognise that farmer deserve a fair
price for what we produce. We are looking forward to putting a great new product on Woolworths’ shelves
that is fresh, locally produced and tastes great.
“It is to Woolworths’ credit that they have embraced this idea and are committed to making it work in
partnership with dairy farmers in the Manning Valley,” Mr Bale said.
Woolworths General Manager of Fresh Food, Pat McEntee said that the trial of a direct relationship with
farmers would benefit both farmers and consumers and could be a model that will enhance the long term
sustainability of the dairy sector.
“There is no doubt there are a variety of significant issues affecting different parts of Australia’s dairy industry.
No one factor – whether it be the impact of $1 milk, or a tough export market exacerbated by a high
Australian dollar – is solely responsible for state of the industry.
“This trial will not be the silver bullet to fix all the problems but we think it could herald a new way of
delivering better returns to farmers and a more efficient supply chain.
“Over the last couple of years, our customers have expressed their concern about dairy farmers’ long term
future in this country. We have also taken on board the industry’s concerns about the negativity that has
been attached to their commodity and we have looked for opportunities to improve this.
“Australia has one of the lowest levels of dairy consumption among developed economies and we see great
opportunities to work with farmers and processors to grow demand, promote innovation and ensure the
industry has a bright future.
“We are excited to try a new way of doing business with a great partner – the Manning Valley dairy farmers.
We thank them for their open-mindedness and collaboration. We look forward to putting a great new
product on Woolies shelves in New South Wales by the middle of the year – we think our customers would
love it,” Mr McEntee said.
Immunity for collective bargaining through the ACCC notification process is required before commercial
negotiations with the Manning Valley farmers can commence. This will cover aspects of pricing, supply
arrangements and contract periods and terms.
For further information please contact
Woolworths Press Office on 02 8885 1033
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