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Debate rages over impact of cheaper milk prices

AUSTRALIA Day 2011 is a day which will live in infamy for milk producers.

That's when Coles started selling $1 a litre milk, setting off a war between Coles and Woolworths, which, according to some, squeezed hard-working farmers out of a livelihood, but according to others, eased the squeeze on families.

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While consumers have been enjoying relief to hip-pockets, advocates for milk farmers say the wars have closed farms.

"There really has been little change as far as anything actually improving from a dairy-farmer's point of view," Queensland Dairy Farmers' president Brian Tessman said.

He said while the majors didn't directly deal with the farmers themselves, they did deal with the processors who dealt with the farmers.

Advocates fear that the large volume of cheap milk flooding supermarket aisles is lowering the overall price of milk, but the supermarkets dispute this.

"Woolworth's own brand milk accounts for just 3.5% of the volume of Australia's drinking milk," Woolworths said in a statement.

However, Mr Tessman says this hides the real issue.

"When the supermarkets say branded milk has regained some of its sales volume, that's only because this has lowered price in order to keep up," Mr Tessman said.

"In actual value, I don't think it's changed at all."

Topics:  coles dairy farmers milk milk price woolworths