The Australian Competition and Consumer Commission welcomes the announcement by Woolworths and Coles of price reductions for fresh milk in the past 24 hours, ACCC Chairman, Professor Allan Fels, said today.
"Woolworths has announced a reduction of up to 27c on one-litre cartons of fresh milk marketed under its own brand. More significant reductions will be made on the two- and three-litre containers. Coles has moved to match Woolworths' reductions.
"The ACCC expects this will have a price flow-on in other branded milks.
"The cuts follow general reductions in the price of milk in most parts of Australia following the dairy deregulation program which came into force on 1 July.
"The ACCC has undertaken a monitoring program of milk prices after dairy deregulation. As part of the program, an 11c per litre levy on liquid milk products was introduced from 8 July to assist Australian dairy farmers improve their efficiency in a deregulated market.
"Prior to today's reductions, the ACCC's preliminary survey indicated that the average price of a litre of fresh milk fell during July in most surveyed supermarket outlets. While the level of reduction varied, most supermarkets reduced the price of a standard one-litre carton of milk by between one and seven cents.
"In contrast to the general reduction in fresh milk prices, products such as UHT and flavoured milk in some states have increased in price. This is because milk used in these products was previously sourced at prices below those of fresh milk. Accordingly, post-deregulation falls in the raw milk costs of these types of milk products have not always been sufficient to offset the new levy.
"The average price of fresh milk in Sydney supermarkets fell by around six cents per litre but price reductions in regional NSW supermarkets were less pronounced with a litre of fresh milk falling by only two cents per litre during July.
"The average price of fresh milk in regional Victorian supermarkets fell by around seven cents. Price reductions in Melbourne supermarkets were slightly less pronounced with a litre of fresh milk falling by an average five cents per litre during July.
"The average price of fresh milk in Adelaide supermarkets fell by around two cents per litre and average supermarket prices for a one-litre carton of fresh milk in regional South Australia remained static during July.
"The average price of fresh milk in regional Queensland supermarkets fell by around four cents per litre but price reductions in Brisbane supermarkets were less pronounced with a litre of fresh milk falling by only one cent per litre during July.
"The average price of fresh milk in Hobart fell by around four cents per litre. Hobart consumers are paying on average about two cents less for one-litre cartons of fresh supermarket milk than at the start of the year.
"The average price of fresh milk in regional Western Australian supermarkets fell by around three cents per litre. Price reductions in Perth supermarkets were slightly less pronounced with a litre of fresh milk falling by two cents per litre during July.
"The average price of fresh milk in Australian Capital Territory supermarkets fell by one cent per litre. Raw milk destined for the ACT market has historically been purchased on a tender basis with contracted prices being typically lower than those of the regulated milk states.
"The average price of fresh milk in Darwin supermarkets rose by two cents per litre. Farm-gate prices in the Northern Territory were not previously controlled and prices had been expected to rise with the introduction of the milk levy. However, the preliminary survey increase is less than anticipated.
"It is expected that the next survey will reflect today's price cuts".