Woolworths has announced plans to source all its own-label fresh milk products from Parmalat in NSW, a move the company said is not related to its 'milk war' with Coles.

The company has moved the supply of own-label milk under the Woolworths Fresh and Woolworths Home Brands labels in the state from National Foods (recently renamed to Lion) to Parmalat. Parmalat, which operates in Australia under the Paul's, Rev and Breaka labels, is an Italian-owned conglomerate, currently under a takeover bid from French dairy giant Lactalis.

Last month, industry body Australian Dairy Farmers struck out at Coles' 'Down Down' price reduction campaign on staples, including milk and dairy products, and called on Wesfarmers, the retailer's parent, to "rein in" the business.

However, a Woolworths spokesperson told just-food that the retailer's decision to switch suppliers in New South Wales was not driven by a move to make up for the cost of the price cuts.

"Woolworths did not approach this tender process to recoup the cost of the price cut on private label milk," the spokesperson said. "The call for tenders occurred before the 26 January 2011 price cut announcement by Coles. The costs of Woolworths decision to match Coles price on private label drinking milk will continue to be absorbed by Woolworths."

The spokesperson added: "The recent tender processes and outcome has been very similar to the tender processes and outcome in previous years. Woolworths considered a range of factors considered in deciding the final outcome including changes to the way milk is delivered to Woolworths in New South Wales (changing from direct-to-store to delivery to the distribution centre)." This story is sourced, with editorial adaptation by AusFoodNews staff, from just-food, the world's leading portal for the global pre-packaged food and retail industries. Its daily mix of breaking news, views, analysis and research serves over 100,000 food executives each month. http://www.just-food.com/