Generic milk ads promise price boost
12 August 1998
Generic milk ads promise price boost
By Catherine Hughes
A GENERIC milk advertising campaign costing £10-15 million a year could boost farmgate prices by 0.24ppl, which would result in a benefit to producers of £29m, according to a new report.
The UK currently consumes 12bn litres of milk a year – with 6bn litres taken up by the liquid milk sector.
The joint report, conducted by the National Farmers Union and the Milk Development Council, claims an effective campaign could increase the UKs liquid milk market by 135m litres a year – a jump of 2.25%.
This in turn would push farmers prices up by 0.24ppl and give farmers a net return of £4.76 for every £1 spent, the report says.
Earlier this year, the milk industry proposed spending £6m on advertising – split equally between processors and producers. However, this amount, the report claims, would have a limited impact on consumption.
The paper, prepared by consultants MMD on behalf of the NFU and the MDC, also claims that liquid dairies would increase their profits by £8m across the board due to increased throughput.
Although the NFU and the MDC support a generic marketing campaign, believing it is capable of producing significant returns to the industry, both warn that farmers bear the greatest risk as its success depends on the
market place which is impossible to predict.
The report, Research into the Generic Marketing of Milk, will now go out for consultation to all NFU members to stimulate debate. If producers give the campaign the thumbs-up by the end of September the Ministry of Agriculture will be approached and asked to carry out a producer poll into whether generic advertising should go ahead.
Funding has not yet been discussed. Milk currently has one of the lowest advertising expenditures in both absolute terms and in relation to its market size of any food product in the UK. In 1996/97 milk advertising totalled £2.7m, whereas the cereal industry spent in excess of £100m and the soft drinks market spent over £60m.