July 30, 2012
Arla and Dairy Crest cancel plans for milk price reductions
UK milk processors, Arla and Dairy Crest, have cancelled plans for reductions in payments made to dairy farmers for milk after a week of protest over the issue.
Arla, which is the UK's biggest milk processor, announced on July 29 that it will no longer implement its planned August-scheduled milk price reduction. Dairy Crest also announced earlier in the day that it would push back its planned August 1 milk price cut by two months, while it continues talks with farmers.
The decisions increase the pressure on Robert Wiseman Dairies to abandon its planned price cut.
The announcements follow a week of protests by dairy farmers across the UK. Arla, Robert Wiseman and Dairy Crest processing plants were targeted during the demonstrations, which saw farmers, blockading facilities using tractors.
Retailers, including Morrisons, were also targeted by farmers protesting against low retailer pricing of milk.
Farmers For Action (FFA), which organised the demonstrations, has immediately called off protests against Dairy Crest and Arla but intends to continue its campaign against other targets.
Earlier this month, Arla announced that it would need to reduce the price it pays to dairy farmers for their milk after a fall in market returns.
However, the firm has now increased its Cravendale premium and secured additional money totalling GBP0.02 (US$0.03) per litre â€“ meaning it is able to maintain a standard litre price of GBP0.27 (US$0.42).
"Following an unprecedented two weeks of activity within the industry, Arla Foods is able to confirm that having recovered money from its customers, and by increasing its non-aligned premium, it will no longer have to implement the planned August reduction in its milk price," said a statement from Arla.
Dairy Crest also announced on July 29 that it has pushed back its planned price reduction by two months in an effort to "find a long term solution for the dairy sector."
"The delay will give Dairy Crest and its farmers time to continue to work together to seek solutions to the current difficulties that are facing the Dairy sector and are affecting farmers and processors alike," said a Dairy Crest statement.
"All Dairy Crest milk protests have been called off immediately following talks between FFA, the rest of the coalition and Dairy Crest," said a statement on the Farmers For Action (FFA) website.
The statement added that the group will now concentrate its energies on other companies.
FFA chairman David Handley told DairyReporter.com that it has since extended its truce to include Arla.
According to Handley, the Arla and Dairy Crest announcements leave Robert Wiseman under further pressure to abandon its planned price cuts. He added that protests resulted in the closure of Robert Wiseman processing plants across the country.
This has resulted in empty shelves in many Tesco stores, he added.
"The FFA fully expects some sort of announcement from Robert Wiseman at around midday. But if no announcement is made, the demonstrations will continue this afternoon," said Handley.
The FFA has been involved in talks with Robert Wiseman, which have so far been unsuccessful. Handley, however, tried to shift the blame from Robert Wiseman, instead blaming its German owner, Theo MÃ¼ller.
"This is all about the Germans trying to exert some pressure," said Handley.