19 July 2016: does the new Arla/Asda milk initiative help the UK dairy industry?

Arla foods launched a new initiative with supermarket chain Asda on 12 July. This gives shoppers the opportunity to pay an extra 25 pence on a four-pint carton of both semi-skimmed and full fat milk. The extra 25p will be returned directly to the farmers in the corresponding co-operative grouping. The initiative is based on research that said 63% of shoppers asked, would be happy to pay more for milk if they knew the extra cost would be returned to farmers in this way.

However, as previously reported on this blog, and more recently in the local press:

“Milk prices have been at unsustainably low prices for several months now, leaving the prices paid to farmers by processors well below the cost of production.

Official Government figures show that the average farm gate milk price in May was 20.44p, which represented a fall of 1.13p or 5.3 per cent on the previous month, and which is some 10p below the 30p per litre level which is considered to be the break-even point for dairy farmers.”

In these challenging times, if feedback from Asda’s customers suggests that they are prepared to pay more, why should the additional cost of milk be a matter of choice by the customer, with no additional burden carried by the supermarket? If all Asda customers pay more for their milk, this would provide far more support for hard-pressed dairy farmers and pave the way for other supermarkets to follow their lead; this really would make this a ‘sustainable business’ initiative by Asda.

---