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Retailers Lock Horns in Another Milk Price Battle

24 March 2009
National Farmers Union

UK - The NFU has criticised Asda and Tesco after news the retailers have once again locked horns in a milk price battle to compete with the discounters for consumer traffic.

NFU dairy board chairman Gwyn Jones has criticised the retailers' shortsighted tactics.

"Competition between the retailers is intense and their actions show just how much flexibility there is in the margins they take. However, we know from bitter experience that they don't often give up any of their margin for long and will come looking to farmers to help redress the balance.

"A lot of work has been done over the past two years to convince shoppers of the need to pay a fair price for milk. The NFU's Why Dairy Farming Matters Campaign and our work with the WI on the Great Milk Debate stand out. Artificially lowering prices to consumers through ruthless discounts totally sends out the wrong message about the real price of food.

"While we fully recognise the plight of consumers and their need to buy good value food, short term discounting is not in the longer term interests of consumers who want year round value, product choice and no compromise on quality.

"Farmers - just like the rest of the supply chain - need sustainable margins in order to invest in new technologies and research, which will ultimately lead to better efficiency, more innovation and greater product choice. With costs remaining high on farm, milk production at a 34-year low and confidence fragile, this price-cutting could force more farmers to go under.

"The NFU has been in contact with all the major retailers, including the big discounters, to discuss our Survival Plan. We want to ensure that responsible retail pricing policies become the norm and not the exception."

TheCattleSite News Desk


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