Muller's CEO responds to dairy protests surrounding controversial milk prices

Recent protests surrounding Muller's September milk prices has forced the CEO to send out a letter to suppliers
Recent protests surrounding Muller's September milk prices has forced the CEO to send out a letter to suppliers

Muller has responded to the recent spate of protests surrouding the controversy over the dairy organisation's decision to not increase its September prices.

In a statement handed out to dairy farmers, Ronald Kers, Group CEO of Muller, said he wanted to put more "context" around the milk pricing position the company has adapted.

He said that being a supplier for a "diverse and well invested" dairy business means greater protection from the extremes of a "boom and bust commodity cycle."

"You... benefit from a milk price which is both stable and competitive in a market which is characterised by extreme volatility," Mr Kers stated.

Mr Kers went on to explain Muller's commitment in offering a "competitive" milk price at every point in the market cycle.

"As the past few months have shown, our milk price doesn’t track the extremes of the spot market.

"During this difficult period, many of our competitors introduced contract variances at short notice which exposed their farmer suppliers to spot market returns which were as low as 7 pence per litre."

"Given that this is the route they chose it is only right that they immediately reflect the changes in spot market values as the market begins to recover.

Mr Kers described Muller's competitor increases as "headline grabbing".

"They are only moving these competitor milk prices closer, on an average basis, to the price we pay you, our farmers."

He said that milk price increases are dependent on when Muller sees higher returns within the business.

Müller Milk Group farmer board and blockades

The CEO goes on to explain the importance of the MMG farmer board, an elected group of dairy farmers who represent the wider MMG membership.

"I note that your farmer board has been criticised by those who have no involvement or understanding of our business.

"They represent you with real passion and they ensure that we fully understand your perspective.

"Any work which is on-going with our farmer board is always halted when we are being threatened by illegal activity by third party farmer organisations at our sites.

"Notwithstanding the need to manage disruption to employees, customers and farmers, illegality is serious and not an appropriate environment in which any meaningful discussions can take place.

"It is important that I make you aware of the implications of our sites being blockaded.

"We are confident that our supplying farmers are not the ones who are turning up at our dairies intent on illegally seeking to halt operations, as opposed to peaceful protesting which we have no issue with.

Mr Kers said it is a "little ironic" that some of Muller's most vocal critics have been looking to join as suppliers.

"We will do everything we can to maintain our milk collection service to you - but under these circumstances this cannot be guaranteed.

"I therefore want to alert you to the possibility of delayed or missed collections in advance and apologise if there is any inconvenience.

"We will of course take whatever means we can to protect our business from any disruption that could add cost or impact the service we provide to you, our customers and, therefore, our ultimate consumers."

Background check: Muller and its September milk price

The protest on 7 August and today (11 August) is a result of dairy farmers urging Muller to increase its September milk prices.

The NFU called on Müller to explain why the company is not increasing it in line with 'extremely positive' market signals for UK milk prices to its suppliers.

It has led the the union to condemn the decision, which it says is "beggars belief".

"Yes, its farmgate milk price remains competitive but this is only due to the continuing support of retailers with their minimum farmgate pricing mechanism, currently paying around 3ppl," said NFU dairy board chairman Michael Oakes.

He said that Müller’s non-aligned suppliers – estimated at around a third of its 1,900 farmer suppliers – would be frustrated that they were not seeing the benefits of a market that was starting to experience positive price movements after two years of downturn.