By Aimee Chanthadavong

The war between Australia’s supermarket giants continues after Coles decided to slash its Coles Brand fresh milk prices by 33 per cent.

As part of its Down Down campaign, Coles has reduced its two litre bottle of Coles brand milk from $2.99 to $2.

Coles merchandise director John Durkan said in a statement this move is part of Coles’ focus on achieving what customers want.

“Since June last year Coles has cut prices on a range of products with a focus on what customers buy the most and we intend to keep investing in bringing our customers great value in 2011,” he said.

To follow, both Woolworths and ALDI have confirmed with Retailbiz that they have matched Coles’ two-litre milk prices.

Woolworths spokesperson Clare Buchanan said it was a necessary move to match its competitor’s price.

Similarly, an ALDI spokesperson said: “This was done solely in reaction to competitive activity to maintain our lowest price position, which is well understood in the market.”

All three retailers have highlighted that they will be absorbing the costs related to the loss in profits and it will not have any impact on dairy farmers

“Coles is not reducing the price it pays to its milk processors either so this move will not impact them or the dairy farmers who supply them,” Durkan said.

“In fact both farm gate milk prices and contract prices with processors recently increased. Coles is fully absorbing the price cut, bringing great value to customers whilst supporting Australian dairy farmers.”