Retailers Urged Not to Make Dairy Farmers Pay for Cut Price Milk

UK - With mounting concern over the falling milk price on global markets, the National Farmers Union (NFU) dairy board chairman Rob Harrison has issued a rallying call to processors, retailers, and policy makers both in the UK and the EU to work together to safeguard the future of British dairy farming.
calendar icon 22 October 2014
clock icon 2 minute read
National Farmers Union

“As NFU dairy board chairman, I am meeting with all aspects of the dairy supply chain to ensure all that can be done is being done and that no-one is using the current downward price trend as a convenient excuse to make additional cuts to the farmgate price,” said Mr Harrison.

“Only last week Iceland joined other retailers who are using milk as a loss leader. While consumers are getting a good deal in their shopping basket and are being encouraged to buy and use more milk, to all retailers I say this: You must promise to ensure you fund those deals from your own profit margins and not take it from the pocket of farmers – not now and not ever. It’s vital those retailers put transparent pricing mechanisms in place and ensure suppliers are compliant with the Voluntary Code.

“Some retailers – including Iceland - have made assurances that farmers are not paying for this discount but we need that promise from them all. I also have a longer-term concern, which is shared by dairy farmers up and down the country. Put simply, milk being sold this cheaply devalues the product in the eyes of consumers. This could have long-term negative ramifications for the sector as a whole. We know milk is a staple in the diet of men, women and children across the UK and it is extremely worrying to every dairy farmer to see it being used as a battleground between retailers.

“The current global situation has led to a crisis for many British dairy farmers. Many are selling milk at well below the cost of production and while some retailers have made great strides forward to create clear and fair formulas in how they pay their dairy farmers, we are concerned that the long term impact of extremely low retail milk prices on the industry could be very serious for all concerned.

“Everyone needs to play their part to ensure British dairy farmers weather this global price storm. I will continue to meet with policy-makers both here and in the EU to look at what market interventions are possible and continue the work we have in place on the voluntary code which helps to ensure fairness and transparency in the supply chain between processors and their suppliers.”

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