UK: First Milk "withdraws" plan for price cut

By Dean Best | 26 July 2012

UK co-op First Milk will not cut the price it pays for milk on 1 August, pledging to help develop "better structures" across the industry after weeks of anger from farmers.

First Milk said today (26 July) it had "withdrawn" plans to lower the price to farmers in its milk pool by 1.7p per litre. Farmers in its "balancing" pool were also set to face a cut of 0.7ppl.

Farmers have held protests and blockades at processing and retail sites in the last week to show their anger at plans from processors to cut farmgate prices. Retailers including Asda, Morrisons and The Co-operative Group, have also faced criticism for the price they pay for milk, although they have since increased the premiums they day.

First Milk chief executive Kate Allum said the co-op was still in talks but said it had to "show leadership" on the issue and "remove uncertainty" for its farmers.

"On that basis, we have decided to immediately withdraw the planned August price cuts that were put in place as a result of moves by our liquid customers," Allum said.

"This has been a turbulent time for the whole industry, but unless we immediately grasp the nettle, the progress we are seeing right now will be short-lived. Dairy farmers have spoken with one voice over the last few weeks, and they've made it clear that they reject the existing model where they are price takers and favour working together to gain an equal seat at the negotiating table. It is therefore critical that the whole dairy supply chain now looks to develop better structures and relationships for the short, medium and long term. We plan to make sure that First Milk plays a leading role in that process."

The withdrawal of First Milk's planned price cuts means its standard price for its liquid pool is 26.05ppl. For its balancing pools, the price is 26.10ppl.

Earlier today, Dairy Crest confirmed it would postpone a cut to the farmgate milk price that was due to come into effect on 1 August.

Sectors: Dairy, Private label, Retail

Companies: First Milk, Asda, Morrisons, The Co-operative Group, Dairy Crest

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