Milk cut branded very disappointing

Wiseman’s decision to reduce its milk price by 2.2p per litre from February 1 was branded as "very disappointing" by the NFU.

NFU dairy board chairman Gwyn Jones said: "Clearly this is very disappointing, but not wholly unexpected in an industry where one milk buyer still follows another’s lead. What is concerning is the magnitude of the price cut, which is larger than any other cut and difficult to reconcile for a liquid milk buyer."

The news follows Dairy Crest’s announcement last week that it was cutting its February milk price by 1.75ppl, and its Davidstow price by 1ppl. This was linked to the pressure of funding retail promotions, and lower returns from ingredients markets and doorstep sales.

The announcement takes the basic Wiseman’s non-aligned price to around 24.8ppl and its Sainsbury’s rate to around 26.3ppl.

Mr Jones said: "We can’t ignore the impact that these cuts will have on Sainsbury’s dedicated producers, supplying milk through Wiseman’s and Dairy Crest.

Members of Sainsbury’s Dairy Development Group are all producing milk to Sainsbury’s exclusive standards and Sainsbury’s has invested millions of pounds in its dedicated suppliers in the last few years.

Yet both the retailer and its dairy farmers are being let down by milk buyers imposing price cuts and undermining their efforts.

"It is time that Sainsbury’s, Asda and Morrison’s matched Tesco’s achievements on liquid milk by establishing a proper pricing calculation, based on transparent pricing formulae, that is detached from commodity market pricing and which develops long-term, trusting relationships in the supply chain.

"Quite simply, these retailers must stop coming up with excuses as to why it can’t be done and take control of their milk supply."