Morrisons slashes shelf prices – but says farmers won’t pay

Morrisons has slashed more shelf prices but says it will not be hitting suppliers’ pockets.

The price of 200 items, including milk, butter and eggs will be cut this week by up to a third as the supermarket continues to try to compete with the discounters.

However, a Morrisons spokesperson said that the supermarket would be “swallowing” the price cuts and that suppliers – including dairy farmers – would not have to suffer reduced farmgate prices as a result.

The retailer’s own-brand four pints of milk will be cut from £1 to 89 pence, taking it to the same price as Asda and Aldi, while Sainsbury’s and Tesco remain at £1.

Morrisons free-range eggs will also fall from £1.89 for a dozen eggs to £1.69, while own brand British butter will drop from 95 pence for 250g to 88 pence.

Price cuts must not undervalue British food

The NFU’s head of food chain Ruth Mason, said:

“Farmers need to see maximum value being derived for the products they supply otherwise it threatens to undermine the longevity of the UK farming sector.

“Morrison’s are strong supporters in sourcing British products and it is something their customers have come to expect.  

“However, on their liquid milk sourcing, they have yet to follow industry leading initiatives based on cost of production and are not matching their core competitors in the retail sector in this particular area.”

Ongoing cuts at Morrisons

Since last year Morrisons has cut the price of 1,665 items by an average of 16% and has pledged to invest £1bn over three years in reducing shelf prices and other offerings to draw customers in.

Ms Mason added that farmers could not control retail prices, but that it was essential that any price cuts were not linked to the farmgate price.

“We wish to see retailers and the wider supply chain have a responsibility to put measures in place to ensure a sustainable supply chain is in place, that gives a transparent fair price to farmers,” she said.

The latest cuts are the first under the management of new chief executive David Potts and come as part of an overall restructuring at the retailers’ head office, which has seen the removal of the position of agricultural manager.

The supermarket narrowly avoided falling off the FTS100 last week after figures from Kantar Worldpanel showed Morrisons had returned to growth for the first time since December 2013.

Along with the other of the Big Four (Tesco, Asda and Sainsbury’s) Morrisons is fighting to keep the rapidly growing discounters at bay by ramping up price cuts and trying to redefine the supermarket’s offering.

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