Iceland Foods has become the next UK retailer in the firing line over the price farmers are paid for milk.
Protests organised by Farmers For Action and backed by the National Farmers Union will target Iceland stores in a bid to highlight the low price paid to farmers who supply the frozen food specialist with milk.
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Farming organisations have hit out at the UK’s retailers after the country’s largest dairy processors – Robert Wiseman, Arla Foods and Dairy Crest – announced a series of cuts that will bring the farmgate milk price down by a total of between 3.65 pence per litre and 4ppl from 1 August.
Farmers argue that value must be passed down the supply chain from retailers, who have the widest margins. Dairy processors and farmers alike have been struggling to make liquid milk production profitable in the face of declining commodities prices and rising input costs.
Retailers including Asda, Morrisons, The Co-operative Group, Aldi and Lidl have all increased the premium that they pay their farmer suppliers. However, to date Iceland has stood firm on its procurement policy.
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Responding to the protests, a spokesperson for Iceland emphasised the retailer does not buy its milk directly from farmers, but procures it from dairy processors.
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By GlobalData“Iceland has not reduced the price it pays for its milk, which is all supplied by British processors. We will continue to work very hard to ensure that our suppliers and our customers get the best deal possible,” the spokesperson said.
Iceland has seen no impact on operations from the protests outside processing plants or those planned to be staged outside stores, just-food understands.
However, pressure on the retailer continues to mount. Agriculture minister Jim Paice highlighted the price that Iceland sells milk at – GBP1 for four pints – during a recent Parliamentary session.
Paice held meetings with Asda, Morrisons and The Co-op yesterday. The Department of Environment Food and Rural Affairs said the minister wanted to “discuss how they can ensure the long term sustainability of the dairy industry”.
It is understood that Iceland management also had a telephone conversation with Paice. However, the group does not appear to have softened its stance.
