Tesco are 'decimating' dairy industry, says Farmers for Action

Tesco have been accused of switching 200 million litres of supplied milk from Arla, a farmer owned co-op and giving that quantity to independently owned Muller, done at a time when the dairy industry is facing some of its 'darkest hours'.

This means 200m litres of milk destined for Westbury at a farm gate price of around 16ppl.

"Tesco will say, which will be correct, they are still paying a COP figure to all their producers and we support that, but this has deciminated the rest of the liquid dairy sector," Farmers for Action said.

"Whilst this is happening, we understand from various sources that Muller are offering liquid milk at discounted prices to try and get business away from Arla. "

Farmers for Action said an individual employed by Tesco has said the decision has not yet been finalised.

"So we say to you Tesco, if you want to avoid thousands of farmers coming to your stores to tell the consumer, shutting down your distribution centres, you need to reinstate a farmer owner co-op as your 50% supplier on liquid milk," said David Handley, Farmers for Action leader.

"If not, a fight you will have, the rest of us have got nothing to lose. Your actions will impact on all but your own selected bunch of dairy producers. We are not prepared to sit back and accept what you are doing. You can issue Writs, threaten legal action, you can do what you like because we are about to fight to stop our industry being destroyed by you, a major retailer."

A march to Westminster has been proposed and is seeking to involve all sectors of the industry, with 1,000 pledges already made by producers and other supporters.

"You could avoid this, Mr Cameron, if you attended to what Tesco are currently trying to do to the dairy sector. You and your government have let our industry down, you have let the countryside down, you made promises to many sectors that you were going to turn things around, what has your government done?" said FFA.

A spokesperson for Tesco said "Our goal is having long term priorities and having high animal welfare standards. Being part of the TSDG is part of that."

Arla is the latest milk buyer to drop its milk price – members will see their price drop by 0.75ppl from February 1. This comes on the back of increasing UK and EU milk supplies and a stagnant, if not depressed, global market.

NFU dairy board chairman Rob Harrison said: “With no sign of a market upturn in coming months we will inevitably see a large number of dairy farmers leave the industry. No-one can continue to produce milk at a loss.

“Dairy farmers are rightly questioning why this is happening. We know that global factors have impacted demand and milk volumes in the UK and across Europe continue to increase with no sign of slow down. Milk contract terms and pricing schedules are being changed with no negotiation, flouting the voluntary code, and farmers are being put on notice. It is a bloodbath and those suffering the most are our hard working dairy farmers.

“I’d urge every dairy farmer out there to seriously look at his or her own business and question whether it can survive another period of low milk prices. The NFU is meeting with banks regularly but take clear advice and plan ahead – I want you to speak to your own bank, your consultant and your accountant.

“And milk buyers. We want confirmation that you’re not taking advantage of the current market downturn and that you are doing all you can to add value to every litre of British milk. We’ve recently written to the main UK milk purchasers to assess compliance to the voluntary code code on contracts – once we have the responses we will clearly see which are treating farmers fairly and which aren’t.

“My message to everyone – retailers, food service and manufacturers - now is the time to show that you support British dairy and want to see a thriving, sustainable industry in the future. Farmers want confirmation that you are serious about the future of UK dairy.

“Farmers and their processors need to look at new ways of mitigating the impacts of price volatility. There are various ways this is being done – through hedging, fixed-term fixed-price contracts – and there is no one size fits all. Ultimately the decision will depend on what suits each business best.”