A row has broken out within Dairy Farmers of Britain over which farmers will get contracts to supply milk for Tesco's new regional range.

Some 150 contracts for the Localchoice milk are on offer, each worth 23ppl to farmers paid less than 17ppl. DFB will choose from a shortlist of 300 members across the 14 regions in the initiative, and supplies should begin in mid-May.

Tesco reckons the market for its Localchoice milk will account for 60 million litres in its first year. It is expected to sell for a small premium to conventional milk (58ppl) in stores, so if it performs as expected, it would net sales of at least £36m.

But some of DFB's 2,500 members have accused the co-op of abandoning its principles over the deal and claimed most of them would not benefit from the contracts. Comments posted anonymously online at fwi.co.uk said: "Does a co-op not do what it says on the tin: collaboration for mutual benefit? Has my money not paid the wages of those salesmen, directors and others that have negotiated this deal? It is becoming a case of haves and have-nots."

A DFB spokesman dismissed complaints that the co-op was acting like a private company. "No one member will be worse off than they are at present as a result of this deal."

He added that Localchoice could even improve members' average returns because it was diverting 60 million litres from lower-value commodities into high-value fresh milk.

Hopefully, he said, Tesco would increase the numer of contracts so more farmers would be involved. "It'll show other supermarkets we are capable of supplying liquid milk," he added.

It is not clear what Tesco plans to do with existing local milk lines such as Robert Wiseman's Definitely Devon brand.

A Wiseman spokesman said: "We would be hopeful that Tesco recognises the value in the local brands we already supply."

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