Tesco has announced that it will pay its British dairy farmers 28.69 pence per litre for fresh milk from May to July through the Tesco Sustainable Dairy Group (TSDG).
The TSDG was set up in 2007 to address the uncertainty faced by British dairy farmers caused by volatility in the markets.
According to the supermarket, it has continued to be "integral" to how the retailer has created "sustainable and fair partnerships with producers, growers and farmers across British agriculture".
The group comprises of around 600 farmers, who supply Tesco directly with own-brand fresh and filtered milk products.
Since its establishment, the pricing mechanism of the groups has ensured that Tesco continues to pay a price for the milk that is buys, said the retailer, reflecting at least the cost of production for dairy farmers.
Calculated by the independent consultancy Promar, the price paid by Tesco reflects the average cost of production of all members of the sustainable dairy group.
The price is agreed in collaboration with farmers from the group and will be reviewed every quarter.
Speaking on the day of the announcement, Tesco'd commercial director for Fresh Food Matt Simister said, "The TSDG continues to be the cornerstone of the way we partner with British agriculture. For almost a decade we have worked with our dairy farmers to provide the best possible quality British milk, produces to the highest standards for our customers, whilst ensuring farmers receive a fair price."
He continued, "We know that our customers want us to support dairy farmers during this period of economic uncertainty. And through our direct partnerships with producers, customers can been assured that every pint of own-brand milk they buy from Tesco, offers valuable security for a TSDG farmer."
TSDG farmer and committee chairman James Stephen said, "I have been farming for many years and have seen firsthand how volatile the industry has and continues to be."
The Tesco Sustainable Dairy Group provides confidence to plan for the future, he added, so that it can focus on the things that matter most to customers - "delivering high-quality British milk, with high animal welfare and farm standards."
The new price covers all Tesco own-brand fresh and filtered milk - 1, 2, 4, 6 pint and 1 and 2 litre – excluding organic mil); single, double and extra thick double cream - 150, 300, 600 ml - products and mature and extra mature cheddar.
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