Aussie supermarket chain Coles has increased home-brand liquid milk prices by up to 20c a litre, with Woolworths set to follow as war in the Middle East starts to hit Australian grocery costs. The price rise will support the company’s bottom line against pressure from higher fuel and operating costs, while some of the revenue will be temporarily passed on to dairy farmers.

One litre of Coles brand fresh milk has risen from $1.65 to $1.85, with two litres up from $3.20 to $3.55 and three litres from $4.65 to $5.15. Long-life milk has also risen in price.

Coles told its home-brand dairy farmers it would temporarily pay an extra 5c a litre on top of their farm-gate price and make one-off relief payments to a combined value of $1m.

Norco’s chief executive, Michael Hampson, on Monday announced the co-operative would also increase its milk prices to cover its members across 190 farms. Norco full cream milk retails for up to $2.90 a litre in major supermarkets but the hikes will leave families paying an extra 30 to 50c a week, Hampson said. “We need to make sure that we are supporting dairy farmers right now … otherwise, we will see significant milk shortages over the balance of the next 12 months,” he said.