Dairy Crest plans to tackle milk price row

 

One of Britain's largest milk suppliers is relaxing rules that tie crisis-hit farmers into lengthy 12 month contracts.

Dairy Crest, which supplies around 15% of British milk production, said farmers will be able to move their milk supply with three months' notice if they are unhappy with price changes, instead of the 12 months currently.

The move will give farmers more flexibility and comes as part of measures to help offset the impact of damaging milk price cuts on the industry.

But the change will not come into effect until after Dairy Crest's 1.65p per litre price cut planned for August 1.

Dairy Crest - behind well-known brands Cathedral City, Clover and Country Life - is one of a number of milk producers that have slashed the price they pay farmers for milk after seeing the value of cream plummet this year.

The National Farmers Union (NFU) said it welcomed the decision by Dairy Crest to reduce the notice period for milk suppliers.

But it warned farmers wanted to see a reversal of the price cut and would demonstrate again if the reduction was not scrapped.

More than 2,500 farmers gathered in London last week to protest about the cuts.

Robert Newbury, chief dairy adviser at the NFU, said: "I'm glad to see Dairy Crest is moving to improve the way it deals with farmers.

"But the clear call from farmers is that the price cuts should be reversed."

Dairy Crest's latest price cut follows a 2p per litre reduction in May and will see farmers paid just under 25p a litre for milk - less than the 30p a litre it costs to produce milk, according to the NFU.

The NFU said there are fears many milk farmers will be forced out of business.

Mr Newbury said: "It's taking them to an impossible price to maintain and many aren't sure if they'll now make it through the winter."

Dairy Crest is appearing in front of MPs today to face questions on the crisis, alongside supermarket chain Asda and farmers' representatives.

The group admitted its milk price cuts had "put pressure on our supplying farmers".

Mike Sheldon, group milk procurement director at Dairy Crest, added: "We fully understand the difficulties our farmers face and we have been working with their representatives at Dairy Crest Direct to explore what we can do to further improve our milk contracts.

"Weak cream prices have increased this pressure so we have stepped up our efforts to provide support, and we are pleased to be able to announce what we believe is a significant step forward at this stage."

Alongside the change in notice period - which will apply to its standard milk supply contract farmers - Dairy Crest has also agreed to give farmers four weeks' notice of any price changes and appoint an independent consultant to review the mechanism behind the company's milk pricing process.

The group has already agreed not to cut prices further for standard milk supply farmers this year, following the planned reduction next month.

Dairy Crest has 1,300 direct milk suppliers, who between them supply around 1.7 billion litres of milk a year.

Just under half of its milk suppliers are on the standard contracts and have been hit by the recent price cuts.

Dairy Crest, which is also holding its annual shareholder meeting today, confirmed its dairy division was continuing to suffer from difficult market conditions, which saw the group slump to a £10.1 million loss in its last financial year.

The company, which employs 4,000 people in its dairies business and 6,000 people overall, has seen its dairies division struggle from intense competition among "middle ground" customers, such as small retailers.

It is slashing costs and announced in April it will close two dairies to help turn the division around.

But it said total sales of its key brands, which also includes Frijj milkshakes, had increased by 15% in the past quarter.

PA

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Bookkeeper / Office Co-ordinator

£9 per hour: Recruitment Genius: This role is based within a small family run ...

Recruitment Genius: Designer - Print & Digital

£28000 - £32000 per annum: Recruitment Genius: This Design and marketing agenc...

Recruitment Genius: Quantity Surveyor

£46000 per annum: Recruitment Genius: This property investment firm are lookin...

Recruitment Genius: Telesales / Telemarketing Executive - OTE £30k / £35k plus

£18000 - £35000 per annum: Recruitment Genius: This company specialises provid...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003