Retailers say other factors are at work

Farmers clear shelves of milk in protest over low prices

Dairy farmers milk protestDairy farmers have stepped up their protests at supermarkets over the price they are paid for their milk.

They have been clearing shelves by buying milk in bulk and giving it away. Supermarkets in parts of Scotland have been targeted.

The farmers claim current pricing of milk by retailers means they are being paid less than it costs to produce, forcing some of them out of business.

Dairy farmer Bryce Cunningham, said: “We are being pushed way too hard. Something has to happen. Hopefully we are going to educate the customer and something will be done.

“At the moment we’re being being paid 15p a litre for every litre of milk that we produce. It’s costing me 24p to produce this milk.”

The supermarkets have hit back, claiming there is no link between the price they charge and what farmers receive.

A Sainsbury’s spokesman said: “Our retail price is not related to the price we pay our farmers. Our milk prices are competitive for our customers, while also paying our dedicated dairy farmers a fair price that protects them against volatile markets.”

Darren Blackhurst, commercial director at Morrisons, said: “We try to pass on lower prices to our customers wherever possible.

“We do recognise however, due to reduced global demand, that this has created an oversupply of British milk, creating difficult conditions for many dairy farmers at present.”

David LonsdaleDavid Lonsdale (left), director of the Scottish Retail Consortium, said a number of factors were behind the current low prices.

“The root cause of the reduced price currently being paid to farmers for their milk is one of supply and demand as confirmed by several recent parliamentary reports on dairy prices,” he said. “Declining worldwide demand for milk, coupled with a stronger pound, the ban on food exports to Russia and an increase in supply to a 20 year high has led to a reduction in the prices farmers are receiving.

“Our grocery members have a strong record of both sourcing dairy products in Scotland and helping consumers to make a choice when they want to buy Scottish or British through clear country of origin labelling.

“Some individual grocery retailers have reduced the price of milk charged to consumers in store but those retailers alone are paying for the price reduction – not the dairy processors who they buy from and not farmers.

“In fact, retailers continue to pay amongst the highest prices in the market to their suppliers, regardless of the price they charge their customers. There has, unfortunately, not been the same transparency of what others in the market pay for milk, including government and the wider public sector.”

Richard LochheadRural Affairs Secretary Richard Lochhead, left, said: “I fully recognise the difficulties being faced by dairy farmers because of the low price being paid for milk and volatility on the global market. That’s why I am urging all retailers, food service and other buyers, big and small, to get behind our Scottish dairy farmers and support them in this time of need for the industry.

“I would also call on buyers to be more transparent about the prices they are paying dairy farmers – in January Sainsbury’s led by example by going public with their prices. It was refreshing to see retailers competing over the fairest deal for farmers rather than who can devalue milk the most, and we desperately need that sort of commitment again. I plan on raising this issue when I meet with the Groceries Code Adjudicator in September.

“The public will understand the frustrations being expressed by farmers as it must be galling for them to witness massive promotion of imported cheeses, butters and yoghurts, whilst domestic milk secures, at best, a zero margin.”

“I can understand the farmers’ wish to make their voices heard. That is why the Scottish Government and our partners are taking a range of active steps to provide support as set out in our Dairy Plan.

“For example, the First Minister recently unveiled the new Scottish Dairy Brand to help promote our fantastic dairy products, especially on international exports, which attract a premium price of up to 15 per cent more than that paid in this country. We have provided First Milk with capital support, in the form of more than £400,000 towards the Campbeltown Creamery – with £311,000 of that being paid already – and will continue to argue for solutions at the EU level.

“We are in regular dialogue with retailers, food service and others to encourage sales of Scottish products including dairy. In this year of Food and Drink, August is the month of Delicious Dairy – no better month for Scottish consumers to get behind our dairy farmers.

“The Scottish Government will continue to actively encourage investment in new capacity, measures to spread dairy farmer best practice, promote consumption and demand, encourage transparency in the market, explore EU support arrangements, and work with First Milk on business development, including capital support.”

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