Morrisons will launch a new milk brand this autumn which will guarantee that 10 pence per litre of the retail price will go directly to dairy farmers.
The new ‘Morrisons Milk for Farmers’ brand will go on sale at a premium of around 23.7p per SKU (based on today’s retail price of 89p for a four-pinter) or around £1.13, and will sit alongside standard-price Morrisons own-brand milk in the dairy aisle.
The announcement comes on the back of a turbulent week for the retailer, which has borne the brunt of farmer protests over a collapse in farmgate and retail prices for milk with a wave of ‘milk trolley challenges’ – where farmers cleared milk aisles and gave away milk to shoppers.
The protests led to threats of legal action by Morrisons, and counter-threats of further protests by Farmers for Action (FFA), before Morrisons agreed to negotiations with the group and representatives from the NFU today (11 August), in Birmingham.
The Grocer understands that Morrisons had been considering the new brand for some time, and presented the plans to the unions at the meeting today. The new brand will be backed by substantial marketing activity, said a spokesman.
“We recognise that the current market for liquid milk is impacting on hardworking dairy farmers and their families,” said Morrisons’ corporate services director Martyn Jones. “We want to reassure the industry that the retail price we charge for Morrisons milk reflects the highly competitive retail market. It is not linked to the price we pay our milk suppliers,” he added.
In light of criticism towards Morrisons’ milk procurement policies, Jones added that the retailer wanted to offer beleaguered dairy farmers “practical help” by launching the new brand, which would offer customers the choice “to support dairy farmers directly”.
Morrisons also used the announcement to give more details of how it paid for milk from its majority supplier Arla, with Jones adding that its three year contract with the dairy co-op “uses a cost model that automatically adjusts the price that we pay for milk, based on a combination of the independently set farmgate price and other commodities such as diesel and plastics that influence the cost of milk”.
Jones also reiterated that Morrisons had asked Arla “not to pass on further decreases in the current farmgate price to us, but to share any benefit with the dairy farmer instead”.
NFU President Meurig Raymond said: “This is a welcome first step. We need Morrisons to make sure there is plenty of resource available to promote this product. It must also be displayed prominently in-store. We have also had discussions with Morrisons about how it can introduce further initiatives to support dairy, including cheese, butter and yoghurt. We will continue to urge Morrisons and all retailers to ensure that farmers from all sectors who supply their food get a fair price.”
2 Readers' comments