18 September 2000
Asda to pay 2ppl more for milk
By FWi staff
SUPERMARKET chain Asda is to give farmers more for their milk “in a bid to guarantee that the industry has a future”.
The store has approached processors and asked them to increase Asdas cost price by 2ppl from October.
Asda dairy director David Cheesewright said the decision followed discussions with its processors Arla Foods and Robert Wiseman.
Mr Cheesewright said Asda had tried to come up with a fairer price based on market conditions.
There was anger from hard-pressed dairy farmers last month when Express Milk Partnership announced a price rise from October of 1ppl.
“We believe 2p reflects this, rather than 1p quoted in other sectors of the industry,” Mr Cheesewright told the BBC Radio 4 Farming Today programme.
Mr Cheesewright said Asda was prepared to pay the extra money because it was concerned about the future of the British industry.
“We rely on British farmers to keep our customers satisfied.
“Milks a very important product for our customers. We do this as an investment in the future of a healthy industry.”
The news was welcomed by the National Farmers Union, which said the decision came after it had undertaken a campaign of sustained pressure on processors and retailers.
NFU President Ben Gill said: “Asdas announcement is a positive move in addressing the crisis in dairy farming.
“The NFU has been calling on milk processors and retailers to provide a fair deal for farmers and to recognise the value of farmers in the supply chain.”
He said this must only be seen as the start of a process. Other retailers and processors must follow Asdas lead if the industry was to survive, he went on.
The militant Farmers for Action group has also claimed success in persuading retailers that milk prices are unsustainable, creating friction with the NFU.
This month FFA said NFU president Ben Gill complained that FFA lobbying jeopardised other negotiations, a charge denied by FFA.
The average milk price in 1999 was the lowest for 10 years. This year it has fallen further to just 15.34ppl, according to official figures.