Australian household grocery bills have fallen by a total of $175 million after supermarkets reduced the price of milk, retailing giant Coles says.
Coles maintains its move to lower the price of its Homebrand milk to $2 for a two-litre bottle has been a winner for the average shopper.
While dairy farmers are adamant the cut in the milk price by major supermarkets has cost jobs and drained the industry of millions of dollars, Coles says there's no evidence to support their claim.
In an extra submission handed on Monday to a Senate inquiry investigating cut-price milk, Coles insists farm-gate milk prices have not fallen as predicted.
It also says conditions for the entire industry are on the up, with Coles citing Dairy Australia's outlook report saying operating conditions for most in the industry have improved "dramatically".
Coles blamed uncertainty in the milk industry on its main competitor, Woolworths.
"The biggest issue affecting confidence of dairy farmers in NSW and Queensland in recent months is not retail milk pricing but the change in private label supply contracts between milk processors by one of our competitors," the submission reads.
Woolworths this year renegotiated its contracts to supply its private-label milk.
The Australian Dairy Farmers group last week submitted to the inquiry new figures arguing that the industry in Western Australia will lose $25 million this year because of the $1-a-litre price on milk.
But Coles said in its submission that the claim leaves out valuable information, such as the collapse of Challenge Dairy, one of WA' three major industry players.
Coles said farmers continue to forget it had fully absorbed the price reduction.
The Senate's final report on the issue, which has already been delayed once, is now due before October.
