Coles’ tweet shows $1 milk creates shortage

Coles’ tweet confirms $1/litre milk creates milk shortage for consumers


Agribusiness
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The industry no longer has enough milk to meet consumers' demand for both branded and private label milk supply requirement.

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A few days ago, I got a surprise when I opened my social media page to find I’d been tagged by irate farmers asking me what Coles’ response to NSW dairy farmer Adam Forbes’ tweet, as seen below, actually meant. While Forbes posted in late February, it seems the tweet only reached the eyes of Coles’ social media response team early last week. Farmers were certainly quicker to respond and screengrab the post for posterity.

Forbes' tweet was in response to Norco’s recent in-store notifications that it is running short of Norco branded products.

While it is a case of reading between the lines, the message relayed in Coles’ four seemingly harmless sentences is very clear – the industry has reached a point that it no longer has enough milk to meet consumers' demand for both branded and private label milk supply requirements.

On the face of it, Coles’ response seems to be rational and cooperative. In layman’s terms, the phrase ‘in partnership with’ implies that together, Coles and Norco put several alternative ideas on the table and came up with a mutually beneficial solution to help Norco’s current supply shortfalls in Queensland and NSW.

"We have also worked with our other partners…to source them more milk", makes Coles seem to be an exemplary corporate citizen working with its suppliers in times of need.

In effect, this tweet says that Norco should say thanks to Coles for helping them out, when in fact it’s anything but the truth.

Rather than assisting the 100 per cent farmer owned co-op by raising the recommended-retail-price of private label milk, which would allow for some leeway in the margins to keep farmers in the industry, Coles intends to source a larger volume from its other milk supplier, out of Victoria in an attempt to meet Qld and NSW consumers' requirements for fresh milk.

Many may argue that this is just business as usual. Any company that can’t get a product from one supplier is justified in sourcing it from another. In this case, however, Coles is a large part of the reason that Norco and the Qld Dairy industry finds itself in this position, short of milk.

What the market continues to ignore is that supermarkets are key players in the supply chain and have a corporate responsibility to ensure that primary industries, such as dairy, can profitably survive. Woolworths has recognised its role and has done what is right for the dairy industry and ultimately for the consumer.

If Coles wants to continue to spruik its 'what’s best for the consumer' mantra, it had better have a good explanation when the dairy industry turns sour and consumers are left without.

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