First Milk is facing criticism after confirming that only farmers in its Haverfordwest milk field will benefit from Tesco’s recently announced winter supplement for cheese manufacturers.
Tesco announced on 2 September it had extended the cost of production model used in the Tesco Sustainable Dairy Group to farmers supplying milk for its own-label cheese.
It means the retailer will pay First Milk and other cheese manufacturers such as South Caernarfon Creameries 29.93 pence per litre for milk used to make Tesco Standard Mild & Medium Cheddar, Tesco Value and Standard Red Leicester and Double Gloucester, until next February.
First Milk today (17 September) confirmed it will pay the supplement, believed to be in the region of 2ppl, to members supplying its Haverfordwest creamery.
The dairy co-op said the move by Tesco would “directly benefit the farmers who supply the [Haverfordwest] site”, with First Milk chairman Sir Jim Paice welcoming the retailer’s leadership.
“British consumers have demonstrated their support for farmers across Britain who are receiving less than the cost of production for their milk,” he said. “While we are working with others to address this situation, the move by Tesco on cheese demonstrates the difference that can be made by a company who quickly steps up to the mark and takes effective action.”
However, the decision to limit payments solely to those supplying the West Wales plant was met with criticism on social media, with one farmer describing the situation as “an absolute joke”, and another stating First Milk was “a co-op when you pay in, but not when it comes to [a] share in [the] benefit”.
First Milk’s announcement was also criticised by NFU Scotland, with the union’s president Allan Bowie pointing out The Co-op’s Scottish farmers would see no benefit from Tesco’s decision to pay above the cost of production.
“Scottish members of the First Milk co-operative have contributed toward investments made at the Haverfordwest plant in recent years and it is unjustified that they will receive no reward in return for this,” he said. “NFU Scotland has stressed to First Milk that the business must act in a way that benefits its members in Scotland as well as across the United Kingdom.”
It is understood that Tesco cheese sales represent around a quarter of the Haverfordwest plant’s output, with the new payment lifting the milk field’s farmgate price above 21ppl. Farmers supplying First Milk’s six other regional milk fields are currently being paid between 18-19ppl.
Adams Foods currently packs and distributes cheese from First Milk and South Caernarfon Creameries for Tesco. Under the new arrangement, Tesco will pay Adams Foods the increased price, which will then be passed on to the processors and their farmers.
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