Retailers continue to pay fair price to farmers as dairy prices hit by global demand, says BRC

The House of Commons EFRA committee Report on Dairy Prices published today confirms global economic trends as the root cause of the reduced price currently paid to farmers for their milk. A decreased worldwide demand for milk, coupled with an increase in supply, has led to a reduction in the prices farmers are receiving.

Andrew Opie, BRC director of food & sustainability said: “Some individual retailers have reduced the price of milk charged to consumers in store but they alone are paying for the price reduction – not farmers. In fact, retailers continue to pay the highest prices in the market to farmers regardless of the price they charge their customers. Furthermore, retailers have constructed dedicated supply arrangements with dairy processors for their milk supplies to ensure they pass the best prices back to the farmers.”

Retailers routinely promote products in our highly competitive market, but promotions are covered by the Groceries Code to ensure they are fair to suppliers. The Groceries Code, overseen by an independent adjudicator, was developed after an extensive inquiry and is specifically designed to oversee retailers’ relationships with their direct suppliers.

Retailers source the vast majority of their dairy products (over 80% of cheese and virtually all butter) here in the UK. In addition, UK retailers clearly label dairy products sourced in the UK. They alone are following country of origin labelling principles agreed with the government whereby if British milk is used to make cheese or butter it will be promoted as British on the label.