That’s the push from Drought Minister David Littleproud who said the supermarket giant had engaged in a low act by passing on only 3.5c of a 10c/litre drought levy promised to struggling milk producers.
“Coles promised me when I negotiated the deal that all the money would go to farmers,” Mr Littleproud said.
“They told their customers they were helping farmers, then tried keeping the money.”
The ACCC has ruled Coles can pay farmers and dairy processor Norco the $5.25 million it failed to pass on from its ‘drought levy’.
The ACCC says Coles will pay a lump sum to Norco for distribution to farmers within seven days, which represents an additional 7c/litre base milk price increase for the period between April 1, 2019 and December 1, 2019.
Coles will then also pass on the additional 7c/litre to Norco farmers for the period between December 1, 2019 and at least June 30, 2020 by increasing the base milk price paid to Norco for 2 litre and 3 litre Coles branded fresh milk by 7c/litre.
ACCC says the additional 7c is more than the 6.5c/litre amount calculated not to have been passed through to Norco milk suppliers.
ACCC chair Rod Sims said his organisation was fully prepared to take Coles to court over what was believed to be an egregious breach of the Australian Consumer Law.
However, court action would have taken many months if not years, with no guarantee that any money would have been paid to farmers as a result, Mr Sims said.
“Accepting this commitment means that farmers will receive additional payments from Coles, with the majority of the money to be paid to Norco within seven day,” he said.
The settlement does not go far enough for Mr Littleproud, who said the supermarket needed to “put things right”.
“Coles should now lead the way and put at least 20c/litre right across its dairy range, not just on milk to show they really do care about dairy farmers,” Mr Littleproud said.
“They owe it to dairy farmers and the public for failing to live up to their promises and it will allow time for government reforms such as the Dairy Code of Conduct to come into effect.”
When the scheme was launched in March, Coles said an extra 10c/litre would be passed on to Australian dairy farmers.
“Coles will pass the extra 10c per litre to processors who will distribute all of the money to the farmers who supply them with milk for Coles Brand,” a statement read.
That never happened. Only a measly 3.5/litre was paid, according to the ACCC.
Mr Littleproud said shoppers should boycott Coles until it showed support for dairy farmers.
Coles has 821 supermarkets across Australia under the Coles brand and 714 under the Coles Express brand.
Norco has 326 dairy farmer members on 214 dairy farms in northern NSW and Queensland. The cooperative supplies milk to Coles for its Coles branded milk.