Tesco milk contracts get warm welcome from industry

Tesco’s announcement that it plans to give a select group of dairy farmers four pence per litre above the market average has been well received by the industry and politicians alike. 

For many years campaigns have remained determined in their lobbying of government, MPs, retailers and consumers about the need to reappraise the milk price in the farmers favour. 

Although Tesco’s announcement will benefit only a 1000 producers, it is viewed by many as recognition that the current situation is not sustainable and hoped that other retailers will follow suit.

At Farmers Weekly we have received more reaction from interested parties than to almost any other issue.  Here’s a taster.

NFU president Peter Kendall

“The additional premium that will be paid for locally sourced milk from smaller family farms is a particularly interesting and potentially significant element in the package.

“This is a critically important deal for nearly 1,000 dairy farmers directly and we hope for many thousands more indirectly. However, this is not a panacea for the whole industry. Not all milk produced on farms is sold in bottles through supermarkets.

“But it is a groundbreaking announcement that should set a massive precedent for other retailers to now step up to the plate, not just on liquid milk but other dairy products as well. We shall therefore be re-doubling our efforts to create a better structure in the dairy industry to guarantee the long-term future of a vitally important sector which is still very much under threat.”


Robert Wiseman, chief executive, Robert Wiseman Dairies

“Robert Wiseman Dairies has worked hard to facilitate relationships throughout the supply chain, and this move will undoubtedly deliver real benefits to Wiseman producers who will supply Tesco under this new arrangement.

“This is an important enhancement to our long term partnership with Tesco, and we welcome this substantial commitment to invest and seek direct relationships with dairy producers.”

Dairy Farmers of Britain group commercial director, David Potts

“We have thoroughly enjoyed working with Tesco on this unique opportunity, which is a major step forward for Dairy Farmers of Britain. We will be providing Tesco with locally-sourced milk from around 150 Select DFB members who will receive a premium milk price to help them build a profitable and sustainable future.”

Royal Association of British Dairy Farmers chairman Lyndon Edwards

“This is a very positive sign in the market place.  We are pleased and relieved that Tesco has recognised the need to ensure a sustainable dairy supply chain which includes the smaller family farms.

“It is encouraging to see Tesco is offering a milk price that should provide farmers with the scope to cover their basic costs. That is a huge step forward and the break-through we have all been working so hard for.

“However, whilst this announcement will have positive connotations for many, both directly and indirectly, it is of paramount importance that the remaining retailers now follow suit in order to ensure the long term viability of the whole dairy industry.”

Fay Mansell, chair of the National Federation of Women’s Institutes

“Tesco’s new measures to support UK dairy farmers are very encouraging. The WI has been campaigning to improve conditions for dairy farmers since last summer and we are pleased that Tesco has responded by paying farmers more for their milk.

“Paying farmers 22 pence per litre for milk will help them cover production costs and reinvest in their businesses. We hope that all the milk Tesco sells will be sourced in this way. We are also pleased that consumers will have the choice to buy milk from local farms and hope this will be available in all Tesco stores.”

NFU Scotland President, Jim McLaren

“This is a ground-breaking move by the UK’s biggest retailer and one which we wholeheartedly support.

“NFU Scotland and others have campaigned long and hard to make the general public aware of the pressures on those who milk cows for a living.  The huge support received from the public, and genuine concerns over the future of milk production in Scotland have all contributed towards this significant move towards a more responsible, sustainable supply chain for its liquid milk.”

Milk Development Council chief executive Ken Boyns

“Tesco’s announcement proves that better supply chain relationships with sensible contracts mean producers and retailers can work together for mutual benefit.  This relationship also builds a platform for much-needed industry innovation, such as the launch of the ‘localmilk’ range.

 Arla Foods UK chief executiveTim Smith

“Although this move will have no financial effect on our own business, we will work with Tesco and Arla Foods Milk Partnership to quickly put in place the necessary systems and processes to ensure the earliest possible implementation of the new arrangements.”

Shadow Minister for Agriculture and Rural Affairs, Jim Paice

“I sincerely hope that other retailers will follow this example but also that Tesco will look at the other half of the dairy market and seek to source far more of its high value dairy products from the UK industry.”

Dairy UK chairman David Curry 

“The announcement today from Tesco is good news for their farmers and we support initiatives which extend choice for consumers and encourage them to enjoy the high quality products our industry provides.

“Supermarkets are the dairy industry’s biggest customers. The future prosperity of the industry lies in finding solutions with them that deliver benefit throughout the supply chain.”

Country Land and Business Association president David Fursdon

“Tesco’s intention to raise the price farmers receive to around 22 pence per litre without penalising consumers is a welcome move. To the dairy industry, as Tesco would say, “every little helps” and this could make a big difference to a lot of dairy farmers. I would very much hope that other supermarkets take note.”

Farmers Union of Wales milk and dairy produce committee chairman Eifion Huws

“At long last Britain’s biggest supermarket chain has recognised that the dairy industry, at farm gate level, has been going through a really tough time in recent years.

“That is good news but we also hope that the benefits from this deal will be quickly extended to farmers throughout Wales where most of the milk goes into the cheese market.”

Sainsbury’s

“Tesco is one of the last retailers to introduce this kind of initiative but it’s good that they have acknowledged the issues in the dairy industry – and the fact that they are addressing these issues is good for farmers.

“In the past two weeks our agricultural manager and milk buyer have travelled around the country meeting the farmers in our recently established Dairy Development Group to confirm premium payments and discuss the potential for added value products.”

Neil Parish, south west Conservative MEP and chairman of the European Parliament’s agriculture committee

“This announcement has come at just the right time for our beleaguered dairy industry. All dairy farmers are asking for is a fair and sustainable price. We get paid the lowest price for our milk amongst the major producers in Europe.
 
“Tesco has taken the lead, and consumers must now tell other supermarkets to follow suit. Dairy farmers are essential to our rural economy and it would be a crime to let them go out of business.
 
“Tesco’s announcement does not signal the end of our milk price campaign, but I hope it does signal the beginning of the end.”

Shrewsbury & Atcham MP (Conservative) Daniel Kawczynski

“This scheme is to be offered to 850 farmers, but there are many thousands of others who also need to receive a fair payment for their milk.

“Although there are frequent claims that drives for efficiency will cut costs, which is true, how can investment in efficiency measures be made if farmers are making a loss? I hope that today’s announcement is just the beginning – a first step towards a better future for the British dairy industry.