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