Tesco comes clean on milk supply switch

Last week Farmers for Action (FFA) threatened to declare war on Tesco​ and march on Westminster after claiming that the retailer was moving the supply of 200M litres of milk.  

Britain’s biggest supermarket said the move would build a “stronger future”​ for dairy farmers, but FFA argued that it would “decimate”​ the already struggling dairy industry. 

Tesco commercial director for fresh food Matt Simister said: “Tesco has a proud history of supporting British dairy farmers and this agreement with​ Müller​ Milk & Ingredients will create the most sustainable, progressive and customer-focused partnership in the dairy industry.”​ ​

‘Significant volume’ of milk​ 

Milk processor Arla Foods said that a “significant volume” ​of its milk business had been awarded to Müller, which recently acquired Dairy Crest’s dairies. 

Arla Foods UK executive vice president Peter Giørtz-Carlsen said: “While Arla is disappointed with the loss, Tesco continues to be an important and strategic customer.”​   

The Farmers’ Union of Wales (FUW) warned that the supply switch could mean that non-aligned producers become more exposed to milk price falls. 

The union said: “The FUW would urge Tesco to ensure that its liquid milk procurement process does not function to further depress the prices received by non-aligned producers.”​

Müller welcomes contract​

But Müller Milk & Ingredients md Andrew McInnes welcomed the new milk contract with Tesco and offered reassurances to worried dairy farmers. 

“Farmers can be assured that we are committed to offering a leading standard milk price and contract proposition as well as supporting our retailer customers who wish to develop farmer supply groups with whom they can build closer relationships,”​ he said. 

The FFA planned to organise a more than 1,000-strong march on Westminster in March, as the dairy crisis continues.