Coles has offered dairy farmers price increases for signing longer-term contracts to maintain supply for its private label milk and to keep consumer prices steady until 2025. Coles wrote to farmers earlier this week offering to pay up to 20c more per kg of milksolids (kgMS) under 3-year tenure payments. Suppliers in key dairy regions were also offered an extra 8c per kgMS as a step-up for the 2nd half of the current season and were advised that FY2024 and FY2025 prices would increase on those for FY2023.

Coles general manager for dairy, freezer and convenience products Brad Gorman said price rises and longer contracts would give farmers certainty around their income and secure milk supply. Gorman said the tenure payments recognise and reward long-term dairy suppliers.

Food prices are outpacing broader inflation, adding pressure on manufacturers to lift prices.