Call for fresh thinking on milk

Published on Tuesday 15 January 2008 21:26

THE received wisdom in business is that size matters: buying and selling power rule.

However, at the annual Semex dairy conference in Glasgow, David Potts, commercial director of Dairy Farmers of Britain (DFoB), took a different line. This farmer-owned organisation has 2,600 farmer members with an output of 1.6 billion litres of milk and has in recent months made it clear that it wishes to see further rationalisation within the dairy sector.

Potts is obviously a pragmatist. He said: "We have currently three large milk processors in the UK – Wiseman, Arla and Dairy Crest – who handle 90 per cent of the milk sold to the supermarkets.

"There are also around 100 smaller dairy companies processing less than ten million litres of milk between them. They may appear small, but they have the ability to react to the market far quicker than the big players and they can see the opportunities much quicker."

Potts, who has been involved in the dairy industry for over 25 years, is clearly a sharp market operator. The promotion of liquid milk has been a feature of some of the leading dairy companies, but Potts reckons that they have missed out on many profitable outlets.

He said: "All the leading breakfast concerns promote their products, but it is mostly with fruit. It should also be with milk. Similarly, we forget that 20 per cent of the milk sold in supermarkets goes into cups of tea. Why are we not advertising with the big tea companies?"

Local sourcing is now a key element in consumer perceptions and on that front BFoB has close ties with Tesco and several other of the major retailers. Potts said: "This is the fastest growing trend in years and consumers want their milk from farms within 45 miles of their local store.

Potts also contends that price is not a major issue, saying: "If it tastes better and is healthy, then the market can stand that extra price. Every survey has proved that point conclusively, and I think it applies right across the entire food spectrum."