The biggest supermarkets have defended their record in supporting Scottish dairy farmers to a panel of politicians.
Over two days in Edinburgh, retail representatives claimed they paid farmers above the market rate for milk and their development schemes helped the industry’s future.
The supermarkets and groceries code watchdog Christine Tacon were giving evidence to Scotland’s Rural Affairs, Climate Change and Environment Committee, which is running an inquiry into the dairy crisis.
On Thursday, Tesco, Sainsbury’s, M&S, Waitrose and the Co-op stressed their cost-of-production prices cost them millions to run.
Sainsbury’s business unit director James Bailey said it was essential that the way prices were calculated was clear to shoppers and farmers.
“If you look at our price against the market price I believe there has been half the volatility in our milk prices,” he said.
“We do think it is about having informed customers and informed customers can make informed choices.”
When pressed on whether Sainsbury’s cost-covering contracts could extend to cheese, Mr Bailey added the more complex production process meant settling on a number was too difficult.
Tesco agricultural director Tom Hind told the committee Britain’s biggest retailer had paid farmers £150m more than the average milk price since its dairy group’s conception.
“It is really important we have long-term, sustainable partnerships with our suppliers,” he said.
“It matters to our customers and we are also very mindful that we want to be supplied by the best farmers, the most invested farmers, the most dynamic.”
Discounter Aldi said its decision to charge 89p for four pints of milk had benefited shoppers.
“There are a large number of customers who are very financially restrained and the price of milk is very, very important to them,” said Aldi’s John Richardson.
“We have had huge volume increases in the past five years. We have been trying to support the customers through that period.”
Opening the session, retail watchdog Christine Tacon explained the limit of her powers, saying most dairy farmers were not covered by the code as they only supplied supermarkets through processors.
She also said that most complaints she had received from the dairy industry had been about the price farmers were paid, which she could not investigate.
On Wednesday, Scottish rural affairs secretary Richard Lochhead told MSPs he was working on a Scottish dairy brand, which would be launched at the Anuga food fair in Germany in October.
Concerning retailers, Mr Lochhead said he wanted the “murky” details about exactly what dedicated supermarket supply schemes covered to be revealed.
“There is a case for shining more light on that, and we should give some thought to whether the groceries code adjudicator or voluntary codes should shine that light.”
What Scottish dairy farmers supplying supermarkets are paid
- Tesco 32p/litre (Arla farmers receive 24.87p/litre)
- Sainsbury’s 31.6p/litre (Arla farmers receive 24.87p/litre)
- Asda 24.87p/litre through Arla
- Morrisons 24.87p/litre through Arla, 24.59p/litre through Dairy Crest
- Waitrose 33.1p/litre
- M&S 34.256p/litre
- Aldi 26.5p/litre through Graham’s Dairy
- Lidl 26.5p/litre through Graham’s Dairy