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A2 Milk boss backs end of dairy price war

Jayne Hrdlicka says we need to think of the farmers.

Senior Digital Journalist, Your Money

The CEO of A2 Milk, Jayne Hrdlicka, has thrown her support behind Woolworths after the supermarket announced it would stop selling budget milk in a bid to help Australia’s struggling dairy farmers.

Woolworths reported Monday that it would increase its $1 per litre range of milk to $1.10, ending a long-standing competition with Coles and Aldi over milk prices.

“We think that the dairy farmer community is very important to Australia and it thriving in the future is obviously critical,” Hrdlicka told TICKY following the company’s profit results Wednesday.

“What Woolworths has done is great. We obviously pay our farmers a premium for providing us A1 protein-free milk, and we believe it’s important to think about the farmers as well as the consumers.”

The dairy farming sector has long lobbied for a price floor on milk, arguing that the decade-long price war has burdened the drought-plagued industry and sent some farmers out of business.

“I think consumers all appreciate that in order for there to be a future in fresh milk on shelves, that dairy farmers need to have all the right incentives… it’s in everybody’s interest that we’ve got a healthy industry in the long term,” Hrdlicka said.

On Wednesday, A2 Milk Company reported a net profit after tax increase of more than 50 per cent to $146 million from the year before, thanks mostly to a jump in sales of baby formula into China.

The good news came despite fears that Chinese consumers were losing interest in Australian and New Zealand products.

On Tuesday Blackmores blamed changing consumer sentiment in China for its disappointing profit results, sending its stock price plummeting by more than 30 per cent and dragging other China-facing companies along with it.

Hrdlicka also dismissed concerns of any fallout after the decision by Australia and New Zealand to block China’s Huawei technology over security concerns.

“There’s lots of things around us that we can’t control but we’re very focused on the things that matter to our business . That starts with making sure we’re really clear about how we make a difference for young Chinese babies and children developing,” Hrdlicka said.

Watch the full interview in the video above.

Read more: Dwindling Chinese demand creates headache for Blackmores
More: Royal commission: Are farmers being ignored?
More: Newly-listed Coles commits to Aussie farmers

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