Milk Price War in Australia

The term “Milk Price War” has been mentioned many times since the two main supermarkets began to discount their Milk prices.

Even the Australian Parliament got involved … this was one newspaper headline in February 2011

PARLIAMENT will investigate a milk price war after concerns the major supermarkets are attempting to drive out competition.

Coles and Woolworths are engaged in a milk price war that has driven down the price of some milk to $1 a litre. ($2 for 2 litres)

I have often wondered what they were really on about, as it was only normal discounting in my mind.

Today I checked it out, to see how much of a war it really was, or is.

I did a post in November 2009 about the real price of Milk, and I stated these prices:

November 2009:

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$1.79 Local vegetable store two litres of Milk.
$2.17 Woolworths Homebrand Milk Whole 2 Litres

This post is at:

Todays price (September 2011) in Woolworths is $2.00 for 2 litres.

A drop in price of 7.8%.

Dairy Farmers Whole Milk 2 Litres was $3.39 in November 2009
and in September 2011 it is $3.17

A drop in price of 6.5%.

Can this really be called a Price War, that needs Parliamentary investigation, with such small price changes ?

In my situation though, I now pay $1.69 at my local shop, so the two main Supermarkets still have some way to come down in price, to match their actual price competitors.

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