Glanbia incurs farmers’ wrath over milk price cuts

ONE of the country’s biggest dairies has delighted consumers and incurred the wrath of milk producers by cutting 20 cent off a two litre pack of milk.

Two litre packs of Glanbia’s main brands, CMP, Snowcream, Premier, and Avonmore – will now have a standard price of €1.79 in the main retail stores and €1.99 in convenience stores. Competition has always been strong in the milk market and in the past year, it has heated up noticeably as consumers demand better value in the supermarkets as Northern diaries increase their foothold in the south.

This is the second price cut made by Glanbia, the country’s biggest milk processor. Earlier this year, Glanbia announced that it would reduce the rate it paid for milk to a VATinclusive price of 21.04c/l for March milk, which farmers equate to a price of 20c/l excluding VAT. This was an 8% cut in prices.

The Irish Farmers’ Association and the Irish Creamery Milk Suppliers’ Association have both called for an end to the price cuts.

IFA fresh milk producer Donal Murphy said that the milk price for September of 33c per litre is below the cost of production and not acceptable. Others in the sector fear it could lead to milk strikes later in the winter. The IFA has warned that some co-ops have hammered their suppliers by slashing prices to levels last seen in the early 80s.

Farmers have said these price cuts are unsustainable and that 2009 costs require a minimum price of 27c/l for farmers to break even.

A Glanbia spokesman last night said they had little choice but to cut costs as “the consumer is looking for more competitive prices”. Last April, about 2,000 irate farmers protested against milk price cuts at protests in Dungarvan, Co Waterford, Portlaoise, Wexford and Kilkenny. At the time, Glanbia said it recognised the March milk price cut was below the cost of production. This further cut will leave many at the end of their tether and facing big income losses this year.