British supermarket chain Morrisons has written to the National Farmers' Union of England and Wales (NFU) to emphasise how important it is that the UK retains a strong and competitive dairy industry, adding that it will not pass on the cost of any milk promotions to suppliers.
In the letter, published on the supermarket's website, Morrisons stresses the importance of selling 100-per-cent British milk and cream in its stores.
The retailer states that 80 per cent of the cheese it sells is also of British origin, and it believes that this is a higher proportion than any other retailer.
"Our commitment to 100-per-cent own-brand British fresh beef, pork, lamb, chicken and eggs is also well known and leads the UK supermarket sector," said Morrisons.
It continued, "We are therefore really concerned about the impact on dairy farmers suffering from recent price cuts, and particularly so for those farmers who have invested heavily in their businesses."
The degree of price volatility seen in dairy is not helpful for any business, and the recent movements in global dairy commodity prices have been unparalleled, it added. Therefore, new mechanisms to help the industry cope with this level of price movement must be developed, said the supermarket.
"We at Morrisons are committed to doing this, and are well advanced, as evidenced by our cheese contract, which the NFU welcomed last year. We are re-tendering for liquid milk supplies because we are coming to the end of our current five-year contract in 2015, not in response to the current market situation."
Saying that it recognises the increasing level of concern about falling prices, it revealed that a mechanism to address fluctuations in the market will be a feature of any new liquid milk contract.
"Whether people like it or not, the days when the farm-gate milk price could be affected by the UK big four supermarkets are behind us. The UK milk market is now fully integrated into the global market and subject to global forces."
"Any promotions on liquid milk have been paid for entirely by us and not passed on to the processor or farmer," said Morrisons. "We made this clear at the time we launched our 'I'm Cheaper' campaign, and have stuck to our word."
© 2014 - European Supermarket Magazine
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