July 5, 2012

Arla Foods to cut standard litre price from August

With effect from August 1, Arla Foods will cut the standard litre price by two pence per litre.

Arla Foods has implemented the largest cut yet of three other major UK milk processors in the last week to have reduced their farmgate milk prices.

In the latest round of price-cutting, Arla said in a letter to its members this week it will reduce the standard litre price from August, resulting in a 7.5% cut to 24.5 pence.

The company said its business performance has "continued to suffer", primarily due to the "on-going impact of depressed commodity prices".

The cut, however, is just the latest of a number of reductions announced already this week. First Milk blamed declining returns from customers in the liquid milk market for its decision to reduce its liquid pool price by 6.5% or 1.7 pence per litre to 24.35 pence, and its balancing pool price by 0.9 pence per litre.

Dairy Crest also moved to make a 6.2% or 1.65 pence per litre cut this week to 25 pence, while Robert Wiseman Dairies' decision to cut prices by 6.4% or 1.7 pence per litre to 24.73 pence was met with criticism from the National Farmers Union (NFU), which slammed the decision as a "catastrophic example of hypocrisy and unfairness".