South Australian flour mill Laucke says it is being punished by Woolworths because of an ongoing dispute over who should bear the brunt of rises in production costs.

Laucke said six of its products have been pulled from Woolworths shelves because the supermarket giant refused to accept a marginal increase to the wholesale cost.

Managing director Mark Laucke said the company was in negotiations with Woolworths for a wholesale increase of "about 7 per cent" to its product range, but that discussions had broken down months ago.

Mr Laucke said a product supporting the Country Women's Association (CWA) was only re-introduced after a decision to remove it was met with public backlash.

"Woolies is stocking eight of our products they can't stock readily anywhere else," Mr Laucke said.

"They've also been forced to re-institute the CWA scone mix simply because consumers are very fond of the CWA scone mix because it funds the very good public work of the CWA ladies."

Mr Laucke said the proposed price rise was to cover increased costs to the price of electricity and raw materials.

"We've had our cost of electricity double," Mr Laucke said.

"We simply must pass on these unavoidable cost increases or, as I said, viability disappears, jobs disappear, businesses disappear."

Woolworths said it had agreed to the price increase for nine Laucke products, and a spokesperson said the retailer remained "committed to our partnership with Laucke".

"In the last year alone we have accepted an increase of approximately 20 per cent on the majority of the Laucke products we have been ranging," the spokesperson said.

"A small number of products have been discontinued on our shelves due to low customer demand, while others because of consistent non-supply from Laucke."

Laucke fears for long-term partnership

Mr Laucke said sales to Woolworths represented 45 per cent of his retail business, but admitted he was unsure he has a future with the supermarket chain.

"I believe it's their long-term position to effectively derange our products," he said.

"We're forever cutting costs and we can't pass on costs, fair costs like the cost of power and labouring time. What that means is the business loses the confidence to invest."

Mr Laucke described the impact of the dispute as "death [by] a thousand cuts".

"It's not just us. It works all the way down the chain through to the farmers and it affects the farmers as well. It's a morale thing — people just end up giving up and moving on."