Asda has called for other supermarkets to follow its lead after it agreed to increase the price it pays First Milk for cheese.

From 1 August, the supermarket will pay an extra £400/t for the cheese it buys from the dairy processor.

The increase, which comes outside of Asda’s normal review period, comes after what the supermarket described as “extraordinary market conditions”.

‘Rapid changes’

Chris Brown, Asda’s head of sustainable sourcing, said rapid changes in the dairy market in recent months meant cheese prices had not always kept pace.

“This £400 per tonne increase is aimed at correcting this imbalance and we will work closely with First Milk to monitor the market over the coming months,” he said.

‘Match commitment’

“Against the current market backdrop, it is important that milk continues to go into making cheese – helping to keep a great British tradition and rural economies going.

“We call on others in the dairy market to match this commitment to British farmers right now, especially when farming is facing significant challenges from the weather and rising feed markets.”

Passed back to farmers

Jeff Halliwell, managing director of the First Milk Cheese Company, which supplies all of Asda own label cheddar, said it was important the price increase was passed back directly to dairy farmers.

“Asda has now set a benchmark on cheese price for other retailers to follow,” he said.

“We have been speaking with all our retailer and other customers on the need to significantly increase the price they pay for cheese, to reflect market conditions.”