Consumers lapping up $1 a litre milk, data shows Dairy popular ... Consumer are buying cheap milk in greater volumes. The full story on Australia's milk wars will appear in tomorrow's Age and Sydney Morning Herald Australia's big supermarkets, Coles and Woolworths, may have copped a public flogging over their $1 a litre milk but data shows that consumers are showing approval where it counts - in their shopping baskets. At the peak of the price wars in 2011, more than 72 per cent of the milk sold in Coles supermarkets was its $1 a litre private label offering, which gives an indication of the significant gains it has made since it triggered the price war. Coles grew its private label sales by 64 million litres in the two years following its price cuts and captured most of the growth in milk sales over that period. Despite matching the Coles price cuts Woolworths - the market leader - paid the price of being the follower in this case, adding just 10 million litres of private label sales over the period. Industry data obtained by Fairfax Media shows that sales of fresh milk across all of Australia's supermarkets, corner shops, and convenience stores, grew by around 100 million litres over that same period. The industry is still feeling the effects of the price war with any volume growth swallowed by the lower prices, according to market researcher Nielsen. "The price drop inevitably had a downward effect on value sales," said the head of Nielsen's retail business, Kosta Conomos. It has taken two years for the milk category to almost get back to similar value sales seen in 2010. Lower sales revenue is not the only challenge for the industry with all the major vendors going permeate free since Fairfax Media revealed last year that Permeate - a watery, greenish waste product from the production of cheese - was added to milk to cut costs by as much as 16 per cent. Major milk brands like Pauls, Dairy Farmers and Pura have regained some of the market share lost to Coles and Woolworths private label milk since 2011 by going permeate free, but the supermarkets have followed suit offering permeate-free milk for $1 a litre. "The introduction of private label permeate-free products will probably influence price trends incoming months," said the industry body for dairy farmers, Dairy Australia. But not everyone needs to worry. A2 Corporation has sidestepped the industry carnage and doubled the market share of its milk, in dollar terms, across Australia's supermarkets over the last two years in the face of price cuts by all its major rivals. The A2 pitch is built around the A2 beta-casein protein which, it says, "may assist with your digestive wellbeing." The protein is found in the milk of certain dairy cows. The A2 company started identifying these cows with genetic tests and milking them separately to offer consumers milk consisting of the A2 protein rather than A1. The health claims around this protein have acted as the cornerstone of the milk's appeal and lead to massive growth despite being priced at a significant premium to the competition. "We would say A2 is the only brand that has genuinely differentiated positioning compared to other brands and private label," said the head of its Australian business, Peter Nathan. Mr Nathan said the company's fast track growth has not been impeded by the significant marketing spend of the major milk vendors which have now gone permeate free. "If that was the reason for our growth that would have hit us very badly," Mr Nathan said. Our growth has accelerated even during the time that brands have taken permeate out of their product.