FFA and others arrived at Tesco's head office in Herts yesterday to comlain over (a) the launch of the 'value range' of Fresh'n'Lo milk from Wiseman and (b) the cost-plus contract model Tesco operates with its direct supply group, which, FFA says, is intrusive and hands too much power over producers' businesses to the retailer.

 Is this going to have any effect?

Or is the milk price being set by market economics? First Milk and Dairy Crest have both increased their cheese prices. There's supposed to be a premium for liquid so surely Tesco can sell cheap milk if they want - after all they have to come to the market and pay the market price for it...! 

FFA are ineffectual, they always have been. There is immense competition between supermarkets but as long as Tesco continue to pay a good price for milk and take their promotions out of their overall margins, I don't see a problem. The milk price is indeed set by market economics: milk production has been declining for some time, dairy farmers have been leaving the industry, and if processors wants fresh milk, they will have to pay a price to encourage us to produce the stuff. On the cost-plus contract thing, nobody is compel to sign these: if they don't like it, walk away, sell your milk to somebody else.