94% of Queensland’s milk output ends up as drinking milk.
National Foods is the market leader in milk by a country mile supplying Woolies in most of the country with the exception of Queensland (Parmalat).
Private label milk accounts for 51% of all supermarket sales. Up to 30 different brands compete. It is hard to get scale with so many labels.
Milk earns just 1% return on capital for National Foods against 5% for the rest of the National Foods business. But National Foods gets a much better return than the farmers.
Coles intends to lift milk prices in January reflecting a 38% lift in farm gate prices this yar.
Milk is costly to distribute for the processors and for the supermarkets.
Milk is no longer the major drawcard to bring people into the supermarket. For Woolworths mobile phones recharge are fast becoming the biggest sellers.