Unions to grill dairy giant over ‘savage’ price cut

NFU Scotland has called for greater milk price transparency

Farming unions have arranged a meeting with milk processor Muller over its recent announcement of a 1.5p a litre price cut for its non-aligned suppliers from January 2018.

NFU Scotland (NFUS) and NFU England and Wales say they plan to meet with the dairy giant next week to discuss the matter.

NFUS vice-president Gary Mitchell, who runs a dairy farm near Stranraer, said: “Such a large drop in price from Britain’s largest producer of branded and private label fresh milk, butter, yoghurt, desserts and dairy ingredients needs to be properly explained.

“Why have Muller been the first to cut and cut so savagely when they have lucrative contracts that should provide milk price certainty for their dairy farmers?”

He said the price cut announcement was out of line with prices being offered by European neighbours, leaving the UK dairy market “out of sync with the rest of Europe”.

He said farming unions were now demanding full price transparency between farmers, processors and retailers.

“We have written to Grocery Code Adjudicator Christine Tacon and Secretary of State for Environment, Food and Rural Affairs Michael Gove asking them to do what is necessary to bring some badly needed price transparency to this market,” added Mr Mitchell.

“It is imperative that all sections of the industry are open and honest with each other for us to move on from the hard times of a few years ago.”

A spokesman for Muller said: “We are surprised at the NFUS’ criticism of the company for providing advance notice of a price change from January.

“Our understanding is that their preference is for processors to provide adequate notice of a change. We are doing just that, through compliance with the Voluntary Code.”

He said data from levy body AHDB showed a “significant deterioration” in the value of butter and cream of more than 25% since September.

“By contrast, this 5% milk price adjustment takes effect from January, some four months after the decline began,” added the spokesman.