Farmfoods this week is offering consumers any 2 litres of semi-skimmed or whole liquid milk for £1. Booker Cash and Carry is selling 2 litres for only 59p. The hard sell from Booker states, “you can quite easily sell below the discounters and supermarkets; you could even sell two (as in 4 litres) for £1.50 and make a fair margin”.
With words like these, Booker is blatantly taking advantage of the worst dairy crisis experienced by farmers across the country.
While some are already paying a fair farmgate price for liquid milk, and therefore not affecting the farm gate price through retail promotions, others have no sustainable pricing system in place.
So who is funding these promotions? Are Farmfoods, Booker and others taking advantage of poor farmgate dairy prices and therefore are dairy farmers indirectly paying the price for these promotions?
With the dairy industry going through the most difficult time it has ever faced in the past seven years with milk prices far below break-even levels, promotions like these add fuel to the fire to any dairy farmer’s situation.
How can dairy farmers trust their milk buyer when they don’t have any transparency on how their milk prices are calculated? This is only exaggerated when A or B prices and volumes are implemented. Can we be sure that milk buyers aren’t offering distressed milk at any price to aid retail promotions with no regard of how that impacts on farm? Our calls for sustainable supply chains are even more important now, more than ever. We know Farmfoods do not hold long term contracts with their dairy suppliers and therefore are they bulk buying at the cheaper B price?
Whilst the focus above is on liquid milk, farmers suffering the most are those supplying milk into other dairy products. Over the past few months we have seen a few retailers put in place sustainable pricing models on own label cheese. This is far from the norm. If retailers want to secure British dairy products in the future, now is the time to act to support those who are producing the raw materials.
We are calling on all food businesses within the supply chain, including retailers, discounters, food catering business and food manufactures, for clear and transparent supply chains that offer a sustainable milk price back to the farm regardless of its end use.
This blog was first used on The Grocer website