20 July 2012

3 minute read

Europe

According to the Telegraph, on Thursday hundreds of farmers blockaded milk plants across the country, arguing that they are paid less than the cost of production for their milk.

However the protests co-incided with two of the UK’s largest supermarkets cutting the price at which they sell milk to consumers.

Asda has cut the price of four pints of milk from £1.18 to £1, while Morrisons cut the price of four pints to 98 pence.

Farmers accused the retailers of acting irresponsibly, particularly as Asda ran adverts saying they were “Skimming the cost of milk”.

Andrew Hemming, the vice-president of Farmers for Action, said: “This sort of price war completely devalues our efforts and the value of the milk. It is completely the wrong message. Milk is one of the most nutritious foods you will every buy.”

“Consumers and farmers are absolutely disgusted that two supposedly responsible major supermarkets have entered into this at the present time. It shows the bloody-mindedness and the mentality of what we are up against.”

Farming groups have warned that up to 2,000 of the UK’s 10,700 remaining dairy farmers could be put out of business by the low prices they are paid. Last week when 2,000 farmers descended on Westminster to protest about the crisis they face. Farmers have also threatened to disrupt milk supplies during the Olympics.

Dairy farmers say that the cost of producing milk is around 29 or 30 pence a litre. And yet farmers will be paid as little as 25 pence a litre when a new round of price cuts come in next month.

This week Jamie Oliver and High Fearnley Whittingstall, the celebrity chefs, called for shoppers to boycott supermarkets selling milk below the cost of production.

“Our whole landscape is threatened because retailers offer farmers less money for milk than it costs to produce,” they said.

A spokesman for Asda said that although the price of milk has been cut in its shops, it has also announced an increase in the amount that it will pay farmers. From the start of August, the 272 farmers who provide milk to Asda will be paid 27.5 pence a litre, an increase of 2 pence per litre, the spokesman said. The company said that this will increase the farmers’ turnover by around £30,000 a year.

However the spokesman added: “We have also listened closely to our customers, who have told us they want us to lower the price of core staple foods they have to buy every week to feed their families.”

“We are investing our money and margin at both ends of the supply chain - we have invested our margin in paying our farmers more, whilst lowering the price of key staples for our customers.”

A spokesman for Morrisons defended its price cuts and said that the retailer pays dairy farmers 1 pence per litre over and above the price that middlemen pay. He said: “Given the high level of milk in the market, it is important for us to sell as much volume as possible.”

Other retailers such as Marks & Spencer, Waitrose, Sainsburys and Tesco pay their farmers a fixed price for milk, with some paying as much as 32 pence a litre. On Friday the Co-op supermarket said that it will increase the amount that it pays farmers to 29 pence a litre. The rise will consist of a 2.57 pence increase with immediate effect. This will rise to 4.27 pence on August 1.