Dairy farmers are telling consumers not to buy milk at Morrisons, Aldi, Lidl or Londis – and think twice about Asda and the Co-operative – as the battle over prices spills on to the high street.
The row centres on the "farm gate" price paid to Britain's 14,500 dairy farmers, most of whom will, from 1 August, receive just 25p a litre for the milk they produce compared with around 30p before. The price cut will force many into bankruptcy, warns the Royal Association of British Dairy Farmers, which along with the National Farmers Union and Farmers For Action say that 30p a litre is the minimum price that producers can survive on.
The price cut has been pushed through by the major processors, such as Dairy Crest, which pasteurise and bottle much of the milk produced on UK farms. But RABDF chief executive Nick Errington blames the supermarket groups for relentlessly squeezing both processors and farmers.
"In 1996 the retailers were making a margin of about 2.3p a litre, but today it stands at around 15p a litre, and has been as high as 26p a litre," he says. "The margin the retailers are making is just too high and they do not deserve it. The processor has to do all the pasteurisation, bottling and delivery to the supermarkets. All they do is put it on the shelves and collect the money. They have become far too powerful."
The current price at Tesco for a two-pint (1.136 litre) carton of milk is currently 89p, while Asda is running a promotion pushing the price for a four-pint carton to just £1. However, the British Retail Consortium says the supermarkets are the "wrong target" in the battle over prices.
So what can consumers who want UK farmers to survive do? Can your spending power make a difference?
Are all the supermarkets the same?
No. Tesco, Sainsbury, Waitrose and Marks & Spencer are all paying 30p a litre or more to dairy farmers, says the RABDF, which it says is the minimum survival threshold for farmers: "They are not so much the good guys, but they are at least paying 30p." Amid widening protests, Asda this week agreed to raise its price to farmers to 29.5p a litre, while Co-operative raised its price to 29p. RABDF welcomed the rise, but says is still not enough. It reserves its wrath for the supermarkets and mini-markets that pay less than 30p. "Morrisons, Aldi, Lidl, Londis and Mace are among the worst and paying the lowest prices," says Errington.
Is buying from the milkman better?
Yes and no. You can find a local home delivery provider at findmeamilkman.net. But as home delivery has declined in the UK, the market has consolidated into a few players, dominated by Dairy Crest. It is Dairy Crest, the UK's biggest milk processor, which also supplies M&S and Waitrose, that has pushed through price cuts to farmers. Processors say that the price of cream on global markets has fallen over the past year and they have no choice but to pass this on. Cream is important because we now mostly drink skimmed or semi-skimmed milk, with the skimmed-off cream used to make butter, cheese and yoghurt. But cream prices have collapsed from £1,800 a tonne last year to just over £1,000. Unable to make profits from cream, the processors have progressively cut the price they pay farmers. So the likes of Dairy Crest are the enemy in the eyes of some farmers, although, as the RABDF says, they are under as much as a squeeze as the farms.
Are there still independent milkmen?
Yes – look on the internet for one. Sutton Coldfield Dairies, which serves part of Birmingham, was set up by Phil Mitchell, who quit Dairy Crest, saying he was fed up how they were operating. He buys all his milk from the Cotteswold Dairy in Tewkesbury, which sources from farmers in a 30-mile radius. "We pay 43p a litre and deliver to around 1,200 customers in the Sutton Coldfield area" he says. "The price to customers is £1.08 a litre, which is slightly more expensive than the supermarkets, but it is delivered to your door. I reckon the supermarkets are selling it too cheaply anyway, it's a loss leader for them."
Can I buy direct from the farmers?
Nearly. Riverford and Abel & Cole, better known for their organic veggie box deliveries, also supply milk direct from organic dairy farmers. Claudia Ruane, who has the enviable job title of Head of Cow Admiring at Abel & Cole, says all their milk comes from one provider, Nick Gosling's farm in Wroughton, near Swindon. He is paid 74p a litre – three times the average farm gate price – though he also pasteurises and bottles the milk. Abel & Cole, which supplies 45,000 households, charges £1.04 a litre. "As a general policy, we try to cut out the middlemen so the money goes direct to the farmer," says Ruane.
Riverford sources its organic milk from four farms across the UK and charges 99p a litre. That compares with Tesco's organic milk, currently on promotion at £1 for 1.136 litres, down from its normal £1.09.
Organic milk goes off relatively quickly, but can be frozen. Riverford and Abel & Cole recommend customers refrigerate what they need for the next few days and freeze the rest for later in the week.
What about the coffee chains?
Surprisingly, milk for domestic consumption makes up only around half of the milk sold in the UK. The rest is used in schools, hospitals, coffee shops and restaurants. Data on the individual coffee chains is not available, but Errington says: "They are not, to our knowledge, paying 30p a litre. If you are, let us know, and we'll support you."
I'm a headteacher and our school buys a lot of milk. Can we ensure farmers get a fair deal?
Government procurement could make a difference. "Headteachers and public servants should ask where their milk is being purchased and what price is being paid. At the moment they are certainly not paying the production price," Errington says.
