May 30, 2016       

The Australian government has threatened to increase the price of milk in the wake a price war that has seen a liter of fresh milk being priced as low as A$1 (72 US cents), cheaper than bottled water, in supermarkets.

"Retailers need to understand the momentum is there nationally for farmers to get a fairer deal; dollar-liter milk that is cheaper than bottled water is not fair," Federal Agriculture Minister Barnaby Joyce was quoted as telling News Corp on Thursday, Nov. 26.

The "unfair" price war has reportedly put many farmers out of business. "It is seen now by consumers as a bad thing that rips off farmers; it is affecting (the supermarkets') good corporate names, so they should change it", Mr. Joyce said.

"Retailers don't want the government to jump on them, but we will if they don't do anything", he added.

Independent Senator Nick Xenophon said, "It should never have come to this; dollar-a-liter milk price is not sustainable".

"If we have to have an emergency levy put on milk, so be it", he added.

Earlier last week, the government announced a bailout package amounting to around A$500 million (US$358.25 million) for struggling farmers after two diary giants-Fonterra and Murray Goulburn-slashed wholesale prices to sustain the supermarket price war. The wholesale price cut was passed down to farmers, some of whom reportedly lost the equivalent of a year's profit in one day.

The bailout amount would be distributed among the nation's 6,000 dairy producers.