Medina Dairy has announced a 2.7p/litre increase in its core Watsons milk price from 1 July 2021, which will take its standard litre price to 28.24p/litre.
The company attributed the planned increase to the recovery it is witnessing in food service and wholesale customer sales as the country emerges from Covid-19 restrictions.
However, while an increase will be welcome, suppliers are likely to be frustrated that it will not apply until July, given many other processors are implementing price rises more rapidly.
The improved July price will also still be well below Defra’s March 2021 UK average of 29.72p/litre, and it is significantly lower than the prices being paid by some processors for milk for manufacturing – at a time when producers are facing rising feed costs.
It was revealed earlier this year that Medina was in talks with Freshways in the hope that a potential merger between the two companies could create the basis for a viable, long-term fresh liquid milk business.
Both businesses were hit badly by the coronavirus lockdowns, as so much of their trade was connected with the food service sector.
Medina’s most recent set of accounts showed a pre-tax loss of £10m, but this was for the year ending 26 October 2019, so did not include any of the effects of Covid-19.