UK: Arla U-turn on milk price cut
Arla is the latest firm to announce it will maintain its milk price
Arla Foods has become the next UK dairy processor to reveal it will no longer implement plans to cut milk prices next week.
The dairy giant said it could "maintain" its milk price because it had recovered money from its customers and through increasing its "non-aligned" premium.
After discussions with customers and representatives of Arla's Milk Partnership, the company has increased its Cravendale premium and recovered two pence per litre.
Ash Amirahmadi, Arla's head of milk procurement, said: "I am pleased to confirm that Arla is in a position to maintain a standard litre price of 27 pence for non-aligned members of Arla Foods Milk Partnership. We have agreed a transparent reconciliation method with our customers and our supplying farmers to demonstrate that all of the money recovered from the marketplace has been paid out in full."
Arla originally planned to reduce the standard litre price by 2ppl from 1 August, cutting the price 7.5% to 24.5 pence.
After days of protests and blockades, Dairy Crest said yesterday (26 July) it will postpone its planned 1.65 pence per litre milk price cut for two months but added a 2ppl cut already in force still stands.
First Milk, meanwhile, "withdrew" its plans for a cut. Wiseman told just-food today it remains in talks with farmers.
When asked whether Arla could again look to reduce its milk price later this year, a spokesperson said: "Just as a price increase would be a consequence of improved returns from the commodity markets, lower market returns would result in a reduction in the price paid to farmers."
Commenting on the protests that have taken place at Arla sites, the spokesperson told just-food: "There was minimal disruption to our deliveries to customers."
Last week, a number of the challenges facing food manufacturers and retailers were once again thrown into sharp relief. The industry continued to grapple with the cyclical difficulties of a down globa...
Growing competition for space in key emerging markets appears to have convinced Arla Foods that it needs to act now if it is to secure a market for its milk supplies beyond 2015....
Arla Foods has said it aims to double ingredients sales in the next five years as part of a new business strategy designed to increase the dairy co-operative's presence in emerging markets....
- Are consumers getting tired of consuming?
- Work on sugar could stir more clean-label concerns
- Hershey results, outlook, M&A - the top takeaways
- Free-from firm BFree Foods - bitesize interview
- How Danone is winning "key battles" to grow
- Nestle, R&R Ice Cream finalise joint venture plans
- Hershey buys company behind BarkThins brand
- Mondelez sees stronger margins, LFL growth
- Young's eyeing new channels, M&A
- PepsiCo, Target back campaign for gender parity