British supermarkets give ground in milk price wars

British supermarket Morrisons and German trader Aldi responded yesterday to pressure from financially strapped dairy farmers by raising the price they pay milk suppliers.

British supermarkets give ground in milk price wars

UK farmers have said they face financial ruin, with falls in the price of milk forcing many out of work and spurring others to blockade distribution centres and walk cows through supermarkets.

The dairy industry has seen a 25% drop in the amount farmers are paid for milk, caused by a decline in demand from China and Russia and exacerbated by a grocery price war in Britain.

The National Farmers Union has said retailers Tesco, Marks & Spencer, Waitrose, Sainsbury’s and the Co-op paid farmers a price based on the cost of production, but others — including Morrisons, Asda, Aldi and Lidl — did not.

After talks with farmers unions, Morrisons said it had raised its offer to processors of the liquid milk element of its processed fresh milk to a minimum price of 26p (36.5c) a litre through the winter.

Aldi said from August 17 it would pay its three processors a minimum of 28p per litre for all liquid milk sold in its UK stores. On Thursday, Asda, the British arm of US retailer, Wal-Mart, committed to pay processor Arla 28p per litre for 100% of its liquid milk volume from August 17 indefinitely.

Morrisons said it would create a new brand of milk, where 10 pence per litre goes back to Arla farmers, giving customers the opportunity to support farmers.

It announced a similar initiative for cheese saying it will launch a cheddar cheese priced at a 34p-a-pack above the standard Morrisons cheddar price, delivering the equivalent of 10 pence-a-litre to farmers.

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