M&S raises milk payments

M&S raises milk payments

Marks and Spencer has raised the price it pays farmers for milk under its Milk Pledge+ payment model, which is linked to the cost of production.

The company will increase milk payments by 1.322ppl, effective today (1 February). The move brings the headline price the retailer pays for milk to 33.58ppl.

M&S purchases its milk though dairy processor Dairy Crest.

The price retailers paid for milk hit the headlines in the UK last year, when farmers claimed rising costs were making their businesses unsistainable. Since then, a number of the countries multiples have moved to a model that factors in the cost of production. M&S emphasised its milk pricing policy has been in place for "more than 12 years". 

Show the press release


M&S Milk Pledge+ delivers cost of production price rise
Marks & Spencer ('M&S') is pleased to announce that the farm gate milk price paid to its group of dedicated dairy farmers will increase by 1.322ppl with effect from February 1, 2013. This will take the headline standard litre milk price to 33.58ppl.
M&S buys its milk from a dedicated group of dairy farmers through processor, Dairy Crest, with a pricing model based on key production cost indices as well as the retail price of milk.
Commenting on the announcement, Steve McLean, M&S Head of Agriculture & Fisheries Sourcing, said:
"Our milk pledge+ pricing agreement has been in place for more than 12 years and we are committed to this fair and transparent milk pricing mechanism. We recognise that our farmer suppliers are facing difficult times and that they work hard to deliver our unique lower saturated fat milk to provide a point of difference for our customers. It is only right that we deliver a sustainable return for their milk, using our established and independently verified model, which helps to reduce volatility for their farm businesses."
Berkshire dairy farmer and M&S National Milk Pool chairman, Mark Robins, added:
"All dairy farmers have been under considerable pressure in recent months as a result of the weather and rising costs. The transparent milk price model that M&S follows reduces uncertainty and is of significant benefit to the farmers involved. The milk price is based on feed, fertiliser and fuel price indices, as well as being linked to the M&S retail price. The model delivers a stable milk price for 6 months, but the indices are reviewed monthly and reported to the milk pool so that there are no surprises. This latest change reflects the significant increase in feed prices that have occurred over the last six months."


Original source: Marks and Spencer