UK: Aldi next to up milk payments

By Dean Best | 24 July 2012

Discounter Aldi has become the latest UK retailer to increase the amount it pays for milk.

From 1 August, Aldi will pay 2p per litre more to farmers that do not benefit from being aligned to milk contract schemes.

Aldi's increase follows hikes from Asda, The Co-operative Group and Morrisons as retailers face criticism from farmers over the amount they pay for milk.

UK milk farmers have hit out over the price of milk in recent weeks after a series of cuts to the farmgate milk price from the country's largest processors, including Arla Foods, Dairy Crest and Robert Wiseman Dairies. Farming groups have said the processors' cuts, which are set to be introduced from 1 August, means they now lose money from producing milk.

Aldi said its price increase would "offset" the planned reductions from processors. "The recent milk price reductions and proposed cuts announced for August have been applied by processors without any influence from us," an Aldi spokesperson said.

Yesterday (23 July), processors and farmers struck a draft deal on a voluntary code of practice to govern relations in the dairy sector. The agreement, which came after talks brokered by the UK government, followed protests and blockades from farmers at retail and processor sites.

UK farming minister Jim Paice has met representatives from Aldi today as part of a series of talks with the country's retailers over the situation.

"As a discounter, it is our number one priority to provide consumers with market leading value. The discount model runs with narrower margins than the major supermarkets who must take the responsibility to lead the market. We can never be in a position where we are uncompetitive, but strive to always be in a position where we are fair," the Aldi spokesperson said.

"Farmers are facing increasing pressures, not just because of the reduction in the price they are paid for their milk, but also because of the extreme weather conditions. This increase is a direct response to the situation facing farmers at this difficult time.

"Furthermore, we welcome the notion of any scheme that promotes fair pricing for dairy farmers and provides a level platform for all parties involved in the production, distribution and retail of fresh milk."

Farmers for Action, a farming pressure group, told just-food that, despite the agreement on a code of practice, the protests would continue. Farmers for Action chairman David Handley said retailers needed to do more and said processors must reverse the cuts planned for 1 August.

On the Aldi increase, Handley added: "Aldi have already responded with a 2p increase. It's not enough but at least they have responded."

Sectors: Dairy, Private label, Retail

Companies: Aldi, Asda, The Co-operative Group, Morrisons, Arla Foods, Dairy Crest, Robert Wiseman Dairies

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