Ongoing price war
Story Added : 04th May 2011
Farming groups this week argued the heavy discounting is eroding the financial sustainability of some sectors, in particular the dairy industry.
While a range of products have been discounted, dairy continues to be the hardest hit, with some Hunter Valley producers saying they could be forced off the land by the end of the year if the retail ‘milk war’ continues.
Coles hit back with research commissioned by the supermarket, claiming that while dairy farmers faced many challenges, including volatile commodity prices, the recent round of drinking milk discounting did not pose a threat to the industry’s future.
While the inquiry continues, Coles and Woolworths have reported big profits for the first quarter of 2011, with Coles up 7.2 per cent and Woolworths up 3.9 per cent.
Both retailers continue to report deflation in average shelf prices.