Cheap milk in Tesco will not undermine farmgate milk prices, says Wiseman

Robert Wiseman Dairies has denied that its deal with Tesco to stock the processor’s Fresh’n’Lo value milk range will affect prices paid to dairy farmers.

But criticism continues to grow after the retailer agreed to sell Wiseman’s branded value milk range at a 10p/litre discount to its own-branded standard milk, from farmers in its direct supply group.

The semi-skimmed Fresh’n’Lo brand was established by Wiseman in Scotland nearly 30 years ago. It will go on sale in some Tesco stores in England and Wales in 2-litre cartons at £1.06.

A spokesman for Wiseman denied the move would have any negative impact on producers’ farmgate milk price. “There will be no impact on farmgate milk prices. The farmgate price that we offer remains one of the best in the industry. This is simply a function of competition between retailers.”

Dairy cows

Wiseman had no plans to alter the 26.2p/ standard litre base price for its suppliers and said the enhanced contracts most of its suppliers benefited from, with Tesco, Sainsbury’s and Marks & Spencer, would remain unaffected.

But David Handley, chairman of pressure group Farmers For Action, feared that if other retailers began to offer “value” milk ranges, producer prices could suffer in he longer term. “We’ve just started to see some success in getting the consumer to understand the quality of milk and that producers must get a decent return from the market. Why do this to a valued food product – why not to washing up liquid or toilet rolls?”

The retailer’s decision to include the heavily-discounted brand flew in the face of its declared commitment to support dairy farmers, he added.

But a spokesman for Tesco said: “There’s no contradiction here. Fresh’n’Lo complements our existing range – we’re just answering customers’ call for us to help them with the pain [of higher food prices]. It won’t affect Tesco’s farmgate milk price or its direct supply group.”

Tesco was not singling milk out and continued to offer price promotions on all food and non-food products. However, the economy-range milk would be a permanent addition to Tesco’s products, rather than a short-term promotion, he said.

NFU dairy board chairman Gwyn Jones remained unconvinced. “I challenge the statement that this will have no impact on dairy farmers and I don’t believe this won’t affect farmgate milk prices. It’s also very interesting this product is in Wiseman’s name. I would also question where Wiseman is going to get cheaper milk from to supply this range.”