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Why Aussies should be paying more for cheese

Bega Cheese has called on the supermarket majors to stop selling discount blocks of cheese in the wake of Woolworths’ move to quit selling milk at $1 a litre.

Bega executive chairman Barry Irvin says the move by Woolworths to increase the price of its private label milk is a good “first step” to help dairy farmers.

But being able to buy 1kg blocks of cheese for about $8 is arguably a bigger threat to the sustainability of the nation’s dairy industry, he says.

“I understand why people talk about white milk but if you think about something like cheese, you can go into your local supermarket and buy a retailer’s marked block of cheese for $8 or $9 a kilo,” Mr Irvin told the Herald Sun.

“And if you understand that it takes 10 litres of milk to make a kilo of cheese, that is 80c a litre.

Bega Cheese chair Barry Irvin.
Bega Cheese chair Barry Irvin.Picture: News Corp Australia, Aaron Francis/The Australian

“Sometimes I get a little frustrated that the focus is just on white milk when we have many, many farmers that supply companies that produce a range of very good dairy products where the pricing is as every bit as challenging, if not more challenging.”

Woolworths and Coles both sell 1kg blocks of tasty cheese for $7.90. Bega’s 1kg block sells for $11.

Mr Irvin’s comments come after Woolworths last month permanently increased the price of its two and three-litre house-brand milk to $2.20 and $3.30 respectively.

The nation’s biggest supermarket chain will pass on the proceeds of the 10 per cent price increase to farmers.

The move has been enthusiastically welcomed by the dairy industry, which has slammed the decision by Coles and Aldi to continue selling $1 a litre milk.

Federal agriculture minister David Littleproud has called on shoppers to boycott the supermarket chains for refusing to lift their prices.

Woolworths has increased the price of milk in order to support farmers.
Woolworths has increased the price of milk in order to support farmers.Picture: Getty Images

Mr Irvin said it was good to see Woolworths take action to recognise the value of fresh milk, but said that recognition should extend to all dairy products.

“Retailers’ milk is a part of the industry and I would see it as a very good first step,” he said of the Woolworths decision.

“Any time we can get a customer to recognise the value of dairy, the value of Australian-produced dairy and indeed the value of having dairy farmers that are sustainable, that is a good thing.

“But white milk is only one part of what is produced in this country. As a cheese producer, we would love to see those similar improvements in the whole dairy cabinet.”

Bega, whose stable of brands includes Vegemite, Bonox and Zoosh, last week announced it was closing its cheddar and mozzarella cheese manufacturing facility in Coburg in Melbourne’s northern suburbs.

Bega is closing its Coburg cheese factory.
Bega is closing its Coburg cheese factory.Picture: AAP, AAP Image/Daniel Pockett

The closure will result in about 50 job losses.

Mr Irvin said the decision was taken as the city location made it all but impossible to improve or expand the factory.

But he warned other cheesemaking facilities were at risk of closing as plants were not running at full capacity given the drop in the nation’s milk production.

“There is no doubt people will be thinking about ongoing rationalisation,” he said.

“Australia’s milk pool has reduced significantly this year and has been reducing over time.”

Milk production is forecast to fall below 9 billion litres this financial year for the first time in two decades.

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