By Clare Hunter and Tom Kojrowicz

Senators Nick Xenophon and John Williams have called for a fixed price on milk at a parliamentary inquiry this week.

A committee is examining the milk price war initiated by Coles, when the supermarket giant lowered the price of homebrand milk to $1 per litre earlier this year. Competitor Woolworths followed suit.

Citing the challenges the supermarket price war has brought to dairy farmers, Senator Williams accused the Government is failing in its duty to Australia’s primary industry producers.

“We’ve got to return some confidence to the industry and that’s why we’re recommending a floor-price – so these people have some certainty about their future,” he said.

Senator Williams is concerned that the current fixed price on milk of $1 per litre will have a long term detrimental effect on Australia’s dairy farmers.

“We must have a situation where our farmers survive financially,” he said.

“We simply will not have fresh milk. It’ll be UHT milk imported from overseas.”

The plan to put a fixed price on milk has received mixed reviews from consumer groups and organisations such as the Queensland Dairyfarmers Organisation.

Consumer groups are opposed to the idea of the government controlling the price of milk as the current low price of $1 per litre helps ease household budgets.

“We disagree with the idea of any sort of price controls in relation to milk,” Choice spokesperson Ingrid Just said.

“We’d like to see the Senate economics committee inquiry continues in full before any sort of decisions like this are made.”

QDO president Brian Tessman says the supermarket price wars have already damaged the industry.

“What the milk war has done has (is) put a real crisis of confidence in the industry,” he said.

“A lot of farmers are really uncertain about their futures.”