Dairy farmers sceptical of Coles' new milk deal

COLES says it is improving farmers' lot - but for local dairy producers, the jury's still out on its new milk deal.

The supermarket giant signed long-term deals worth $2.6 billion with dairy co-operatives Devondale and Norco on Wednesday.

John Saville, who owns a dairy farm near Nobby, said farmers would only benefit if Coles replaces its $1 per litre milk with a higher-priced product.

"If Coles are going to pay a premium on the milk, and it's not going to go a dollar a litre, as long as that nonsense stops, it'll help the suppliers.

"If this private labeled milk goes in as cheap milk, it'll still have the same effect.

"Just as to what effect it will have on the other branded sales is the question."

Mr Saville said he saw the Coles deal as largely a step to improve public relations.

"Being cynical I'd say they've picked the two cooperatives for the PR exercise.

"The country's littered with empty dairies.

"Probably in a ten mile radius from here, in the last ten years, there would be ten gone."

Queensland Dairyfarmers Organisation president Brian Tessman said while the long-term nature of the deal was welcome, he was concerned about farmers during the transition to the new contracts.

Topics:  coles dairy farming dairy industry milk

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