Milk bought from processor Lion will now be 10¢/litre dearer, with the company announcing it will temporarily increase its wholesale price to support drought-affected dairy farmers.
Announced last Thursday, the temporary wholesale price increase will be applied to all Dairy Farmers and Pura products sold in participating retail outlets across Victoria, NSW and Queensland from next month.
The measure comes off the back of Woolworths and Coles pledging to increase the price of their home-brand milk by 10¢/litre.
The funds raised in each state will be distributed to drought-affected dairy farmers in that state who supply Lion either directly or through the Dairy Farmers Milk Co-operative.
Funds raised will be paid each month to Lion’s participating dairy suppliers in the impacted regions of northern Victoria, NSW and south-east Queensland as a special line item called Lion Drought Assistance.
A committee — comprising a DFMC management representative, a Lion direct dairy farmer and Lion agricultural procurement director Murray Jeffrey — will oversee the payments process.
A representative from a professional auditing firm will be appointed as the scheme’s independent auditor and will be invited to attend committee meetings.
Funds will be distributed among suppliers in the drought-affected regions on a cents-per-litre basis.
For example, if the amount raised from the wholesale price increase in one state in a given month is $100000, and the raw milk volume from suppliers in that state’s drought-affected region is 5millionlitres in total, this will equate to a 2¢/litre Lion Drought Assistance Payment to dairy suppliers in that region.
There will be no obligation on suppliers to accept any Lion Drought Assistance Payments.
Lion Dairy and Drinks managing director Kathy Karabatsas said escalating costs, including for feed and water, had only added to dairy farmers’ woes.
‘‘We are grateful we have secured the support of major grocery and convenience customers, who have indicated their acceptance of this wholesale price increase to Dairy Farmers and Pura-branded milk products, knowing that 100 per cent of the increase is going directly to the farmers who supply our milk,’’ she said.