Meeting Averts WA Farmers Boycott of Coles Over Milk Pricing

The strike of West Australian farmers against Coles' pricing policy of a $1 reduction per litre of milk was averted by a meeting of the producers with the supermarket giant this week.

WA Farmers Federation President Dale Park met with Wesfarmers Managing Director Richard Goyder to prevent a wider farmer boycott after some mad dairy farmers brought up the possibility of no longer purchasing chemicals, fertilizers and farm insurance from Wesfarmers firms and Coles' grocery products.

"(The WAFF executive) weighed up what we should do, and although we all know how much pain these milk prices are causing dairy farmers, we also were aware we did not want a boycott to backfire on us," The Australian quoted Mr Park.

"But we do need to do something about it - dairy farmers must get a few more cents a litre for their milk because prices now are below the cost of production," he said.

Mr Park said Wesfarmers must be given first the chance to address the milk price policy problem before it agrees to a wider boycott of Wesfarmers products. While the grocery giants has not agreed to add a few more cents, the two groups are discussing options and mechanisms to address the issue, Mr Park said.

He added it is ironic that Wesfarmers began as a cooperative in 1914 owned by farmers, but the same company is now making life difficult for dairy producers.

Wesfarmers Corporate Affairs Director Alan Carpenter said the meeting between the company and WAFF was constructive since they agreed to continue with the talks and have an open dialogue on milk prices.

"(A wider company boycott) is one of the outcomes that can befall a diverse conglomerate like Wesfarmers - where what one arm of the business does can affect others - so we need to see if we can work through any areas where we have disagreements to make sure that do not eventuate," The Australian quoted Mr Carpenter.

The cut in milk prices is part of Coles battle for supremacy in the supermarket sector with Woolworths. Besides milk, the two retail giants have also reduced prices of bread, detergent and fresh produce in a price war that appears to benefit the consumer, but negatively impacts producers.

"WA Farmers wants to work with all food retailers to develop a supply model which ensures locally available product is their preferred source, pricing structures are sustainable, and to develop a programme which highlights to consumers the source of their product," The Herald Sun quoted Mr Park.