NFU Scotland president, Jim McLaren, wants other supermarkets to follow Tesco’s lead in negotiating milk prices directly with dairy farmers – and cut out processors from price negotiations.
“Three major multiple retailers increased retail prices by 1.7p/litre last month and 1.3p/litre was supposed to be returned to processors for distribution to farmers to compensate for increased costs of production,” said Mr McLaren.
“In reality, only a small fraction of the increase has come back to producers.”
Mr McLaren wants to see the direct approach extended to other sectors of the dairy industry, including cream and cheese, and sees the Tesco move as a watershed which will provide a template for other sectors, such as vegetables and meat.
“We still have to see how the pricing formula will work but it is a hugely significant move,” said Mr McLaren.
“The processor will effectively become a contract processor. I hope other supermarkets will seek to emulate Tesco and extend the concept to other sectors of the industry.”
And he hit out at processors for failing to capitalise on the strengthening market for cheese.
“Supermarkets tell me they haven’t had suppliers knocking on their door seeking a price increase,” said Mr McLaren.
“This is outrageous and a damning indictment of processors. It shows that processors are doing nothing to ensure that farmers get a fair price.
“No dairy farmer in the UK should be selling milk for less than 20p/litre at present.”
Milk committee chairman, Willie Lamont, said the union was pressing for county of origin labelling to be applied to cheese in view of the huge amount of unlabelled imported cheese being sold by Tesco and other supermarkets.