Logic creams milk levy criticism - The Centre for Independent Studies
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Logic creams milk levy criticism

This week has seen loud criticism of  the milk price levy applied by supermarket chains Coles and Woolworths to assist drought affected dairy farmers. Agriculture Minister David Littleproud labelled it a ‘farce,’ and called for a permanent end to $1 a litre milk, while the Queensland Dairyfarmers Organisation suggested the increases were a ‘ridiculous PR stunt’.

There may be some currency to claims of a public relations incentive for generic brand milk price hikes. However, critics of the scheme ignore two important factors. Firstly, whether a gesture is token or not, as long as there is clarity on where the additional money is going, the supermarkets can do what they want.

Secondly, detractors ignore that concerned consumers can subsidise dairy farmers; and have been actively choosing to for years. Branded milk — as opposed to the supermarkets own generic varieties — has offered consumers the opportunity to buy products that give more back to farmers ever since the milk wars began.

The supermarkets themselves have effectively ensured that such a ‘levy’ exists by offering a wide variety of milk brands, rather than exclusively stocking their own product — something they would be quite within their rights to do.

By operating the system in this manner, Coles and Woolworths have left the ball in the consumers’ court. Even with the recent price hike, consumers still have the option to buy milk elsewhere. Aldi haven’t introduced a levy on their generic milk products, and Coles two-litre bottles of unbranded milk haven’t been subject to the new charge.

If there is any key message to take from the saga it is that, as always, the consumer is the one who ultimately has the power. Those who had previously possessed an altruistic concern for dairy farmers were already buying the more expensive branded milk. Those who have recently become aware of their plight can now pay an extra ten cents a litre to make a contribution.

And those who couldn’t care less will either head to Aldi, or Coles’ two-litre shelves.