Wiseman To Increase Milk Price
One of Britain’s biggest milk suppliers said yesterday that it was putting up its prices.
Robert Wiseman, which supplies milk to Tesco and Sainsbury’s, would not reveal the scale of the increase, but said it was necessary to combat rising oil, utility and packaging costs and falling bulk cream prices. The company said it also intends to pay farmers more for raw milk supplies.
The company supplies the milk for Tesco’s Fresh’n’Low milk, which had its price reduced from £1.44 to £1.06 last month, sparking a price war between the leading supermarkets. After Tesco’s announcement, Asda and Sainsbury’s cut the price of a two-litre bottle of milk to 99p, and Asda slashed the price of a two-pint bottle from 80p to 50p.
I don't see the farmers getting much in the way of the "intended" price increase somehow.
UK: Tesco Milk Price War Could Spell Disaster For Dairy industry
Dairy farmers say Tesco risks sparking another damaging price war after it launched a new cut-price milk line. Britain's biggest retailer has started selling branded Fresh 'n' Lo milk at £1.06 for a two-litre carton, 10p below the price charged by its closest rival.
The move has brought immediate condemnation from Farmers For Action.
David Handley, its Monmouth-based chairman, said it threatened to wipe out all the progress made over the past 18 months in obtaining better prices for milk producers.
"The last time we saw this happen was in 1995/96 when Tesco decided to take on Asda, and we all know what happened then, the sky fell in for a lot of dairy farmers" he said.
Tesco is being supplied with the milk by Robert Wiseman Dairies which has recently opened Europe's most modern processing plant near Bridgwater.
But Mr Handley said milk producers were in no financial state to get caught up in a discount war.
"I really thought we had turned the corner, that the supermarkets had at last got it into their heads that if they want security of supply from British milk producers then they need to be paying a sustainable price" he said. "There was a huge fall-out of dairy farmers the last time this happened and the exodus hasn't stopped yet.
"With rising prices squeezing profits a lot of farmers are already questioning whether it's still worth getting up to milk the cows.
"The prospect of another price war will simply convince thousands more of them that it isn't."
Arla ups milk price 0.5ppl
Arla Foods UK has increased the milk price it pays to its supply partnership (AFMP) members by 0.5ppl.
The price rise applies from June 1 and takes the producer price to 26ppl.
Deputy chief executive of Arla Foods UK, Hanne Sondergaard said the increase came despite the fall in milk commodity prices and followed good progress in price negotiations."The 0.5ppl increase reflects our commitment and that of our customers to improve our price within a very competitive marketplace," she said.
AFMP chairman, Jonathan Ovens, adds said he believed the additional 0.5ppl offered an important boost to members at a time when on-farm costs continued to rise.
"Arla Foods recognises that there is volatility in the marketplace and has agreed to continue to monitor developments, and on-farm costs, to ensure that its current milk price reflects market conditions," he said.
Wiseman price increase "a small step in the right direction"
A 0.5 p per litre price increase announced by Robert Wiseman Dairies today as a move in the right direction needs to be followed by other players in the milk game.
NFU Scotland says whilst the new farmgate price of 26.2 ppl is an improvement, there is little cause for celebration given that it is still below the cost of production which is closer to 29ppl.
And while Wiseman has highlighted a 40% increase in the farmgate price paid to its suppliers in the last full year, NFUS points out that the cost to a dairy farmer of producing that milk has increased by at least the same amount over the same period of time and is still increasing.
"A small number of companies, Wiseman included, have been working hard with their customers to highlight the impact that rising costs are having on their business and the businesses of those who supply them with milk," said NFUS milk committee chairman Willie Lamont.
"Others now need to step up to the plate. It is recognised that an upward move in the prices paid to its dairy farmers is required to instil confidence.
"Robert Wiseman Dairies is the first major milk processor to have announced such an increase and we need others to follow suit quickly."
Mr Lamont says against a background of increasing global and home consumption of milk and dairy products, the outlook is bright for the dairy sector.
"However there are massive short term cost pressures for farmers who are facing rocketing fuel, feed and fertiliser costs and extremely high prices for replacement cows," he says.
"These costs need to be recognised now and the Wiseman move is a small step in that direction."
