ROBERT WISEMAN has become the latest dairy to announce it is considering cutting the price it pays for liquid milk.
In a letter sent out on Oct 27, the company warned: “The milk price gap that has developed between our competitors and us is no longer sustainable in such a competitive market place, and needs to be addressed.
“We need to reserve our position in respect of milk prices from Dec 1.”
The difference between the amount Wiseman and competitor Arla pay farmers has widened to 0.58ppl, after Arla cut prices on Sept 1.
The company is suspected of having cut prices to win a massive 220m litre contract with Asda earlier this year, but Arla says it was reacting to competitors’ previous cuts.
Jonathan Ovens at the Arla Foods Milk Partnership hit back by saying that Wiseman must have promised to shave milk prices in order to win its new contracts with Sainsbury‘s and Tesco.
“It is not market driven. There is no fundamental out there you can hang your hat on,” he said.
“We will obviously have to be aware of what the others are doing, but there is no wish on the part of Arla Foods or the Arla Foods Milk Partnership to cut prices.”
But Farmer’s for Action chairman David Handley said that Asda had promised to push for Arla to reverse its recent 0.4ppl cut, after the blockading of its distribution centres.
A letter from the chain’s fresh food director Andy Adcock said it “very much regretted” price cuts and had urged the big-three processors to reinstate them.
A spokesman for Wiseman said that the company would feel less pressure to cut its prices if Arla backtracked.
Arla’s director of milk buying, Peter Walker, dismissed the FFA claim, saying that Asda had already accepted the case for the price reductions.