Morrisons has announced plans to become the first major retailer to locally source all its own-label, standard fresh milk and sell it at no extra cost to shoppers.

The supermarket this week unveiled a raft of new dairy supply chain initiatives that will include a premium paid to farmers.

Under the plans Morrisons will be rolling out own-label, regionally produced milk in stores in the north east, north west and south west from June. It already sells Scottish and Welsh own-label milk and has similar plans for Yorkshire, heart of England, east of England and the south east.

Shoppers would not have to pay extra for the local milk, Morrisons insisted, adding that the products would feature prominent on-pack branding stressing their regional provenance.

Other new measures included the establishment of a dairy farmers' producer group and a 1ppl increase in the price paid to processors for milk, which it said would go directly to farmers.

It also agreed a three-year supply contract with its processors that included a price increase to reflect tougher market conditions.

"This is about helping as many dairy farmers as possible," said group trading director Martyn Jones. "It will also enable our customers to see that they are supporting dairy farmers in their own region when buying fresh milk."

The supermarket had been under pressure to announce a new milk sourcing structure as it was the only one of the big four retailers not to have a dedicated producer group.

Morrisons' announcement was welcomed by NFU Scotland president Jim McLaren, who said it would be good news for consumers looking for regionally produced milk.

"We have been in weekly contact with Morrisons on this very issue because we had concerns that it was the only retailer not to have a dedicated producer group," said McLaren.

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