Co-op breaks ranks and raises milk price

By Andrew Arbuckle
Published on 21/07/2012 00:00

The dispute between milk producers, processors and major retailers saw a major breakthrough yesterday when one 
supermarket chain said it would raise the price it paid for its milk.

The Co-operative Group, last week named by the farmers’ union as one of the supermarkets responsible for driving down the price of raw milk, announced that it would increase the premium it paid. Farmers in their Co-operative Dairy Group would benefit and would now receive 29p per litre (ppl).

The increase will come in two steps, with a 2.57ppl rise immediately, topped up to 4.27ppl from 1 August, following processor reductions.

Commenting on the move, Steve Murrells, chief executive for Co-operative Food, said the firm was taking the action to help alleviate the “immediate pressures” that farmers were facing, adding: “We are committed to finding a supply model that is sustainable for the long-term future of our dairy farmers.”

Peter Kendall, president of the English National Farmers Union, said he was encouraged by the positive step taken by the Co-op but he added that other retailers also had to move to a sustainable funding model for the dairy industry.

He wanted to see similar lifts in milk prices paid by Asda and Morrisons, who he said were currently “waging war on each other on milk prices”, making a mockery of the situation dairy farmers were facing.

Both these supermarkets were targeted by angry milk producers this week with more than 1,000 protesters at distribution depots in Yorkshire, Leicestershire and Somerset. Protest organisers indicated yesterday that more demonstrations would follow.

Kendall said the focus of the campaign would then turn to the rest of the catering, food and retail sectors including discount supermarkets who collectively buy sizeable volumes of milk.

Meanwhile, NFU Scotland yesterday staged a publicity coup involving the free delivery of milk to more than 300 houses in Edinburgh – and the Bute House residence of Scotland’s First Minister, Alex Salmond, was on the delivery round, receiving the milk from Simon McCreery, of Yester Mains Farm, Gifford.

Afterwards the First Minister described the move as an “excellent way for Scottish farmers to say thank you” to Scottish consumers for their support and to ask those consumers to contact their milk suppliers and ask them to deliver a fair deal to Scottish dairy farmers.

He added: “This is clearly an utterly unsustainable situation. I hope this week’s ministerial dairy summit will move us closer to a long-term solution that will ensure our dairy sector can flourish.”