MILK PROCESSOR Arla has clinched a ground-breaking deal to supply supermarket ASDA with all of its fresh milk.

ASDA, part of the US Wal-Mart group, sells about 450m litres of fresh milk worth £230m annually.

Shares in Robert Wiseman Dairies, which had been supplying the store with milk worth about £70m a year, fell sharply on the news.

Dairy Crest will also lose about £11m of business.

All of the milk supplied by Arla will come from farmers set to be paid on a proposed cost-plus basis and handpicked by ASDA to ensure full traceability.

But another exclusive deal has been struck with dairy co-op Milk Link to bottle all of the store’s milk sold in south-west England.

ASDA confirmed that it would continue to source milk from Scottish farmers for its shops north of the border.

  • For full details and reaction see the Business section in May 28 issue of FARMERS WEEKLY