25 February 2009

2 minute read

Europe

Speaking at the second annual SDDG conference Mr Kendall said the group's success was 'testament to the benefits that true partnership in the supply chain can bring'. However, he went on to challenge the retailer to go further.

"I am genuinely impressed at how Sainsbury's, working with Dairy Crest and Wisemans, has fostered good relationships with its dairy farmers and Justin King's attendance here today demonstrates Sainsbury's commitment to its dairy suppliers," said Mr Kendall.

"When I addressed this conference one year ago I laid down two challenges to Sainsbury's. The first was to make a long-term pricing commitment to your dairy farmers by establishing a Sainsbury's price. I'm disappointed this has not been done and in the wake of recent milk price cuts, and a predicted volatile market, I again challenge Sainsbury's to take control of its liquid milk pricing arrangements.

"Secondly, I challenged Sainsbury's to extend the principles of the SDDG to its cheese producers. I am delighted to hear that Sainsbury's has accepted our challenge on cheese and is launching a Cheese Development Group today, however, while the wrapper looks good, we are yet to see what's inside the tin."

Responding to the challenge of establishing a Sainsbury's price for its liquid and cheese producers Sainsbury's chief executive Justin King made clear that Sainsbury's will continue to invest in its dairy farmers, but did not consider a segregated supply, or a contractual price, as being the right model for the dairy industry.

The launch of a Cheese Development Group, which will be run through Sainsbury's cheese supplier Milk Link is another lobbying success for the NFU, which pioneered the concept of dedicated chains in its Vision for the Dairy Industry in 2005, and most recently called on all retailers to establish dedicated relationships in the cheese sector in its Survival Plan for British Dairying.

Mr Kendall said: "I applaud Sainsbury's for sourcing all of its own label cheese, milk and cream from Britain. Yet, having made such a strong commitment to sourcing British dairy products I am laying down a third challenge for Sainsbury's today, which is to promote the Red Tractor logo prominently, on front of pack, on all own label British cheese lines.

"Once again, I congratulate the SDDG on its achievements and look forward to learning more about the development of the cheese group. I hope to be able to return to this conference next year to congratulate Sainsbury's on responding to the challenges I have set out today."

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