British retailer 'Booths' cuts deal to pay selected dairy farmers top price for milk - Cowsmo

British retailer ‘Booths’ cuts deal to pay selected dairy farmers top price for milk

Britain’s dairy farmers have for decades complained that they are being squeezed to extinction by supermarkets.

Plunging prices paid by the big retailers have seen many go out of business or switch to other forms of farming. In the last 10 years, the number of dairy farmers has fallen from 25,000 to just over 14,500 and there are warnings that 2,000 more could go out of business in the next couple of years.

But now, in what appears to be the first scheme of its kind, one retail chain has cut a deal to pay selected farmers the highest price on the market for the six million litres of milk it sells through its shops each year.

Booths, the family-owned food and drink retailer with 29 supermarkets in the north of England – in Lancashire, Cumbria, Yorkshire, Cheshire and Greater Manchester – has pledged always to pay the milk producers the top rate, currently 35.5p a litre.

While Booths is a minnow in supermarket terms, its decision to negotiate the “Fair Milk” deal with its supplier, Muller Wiseman, will be welcomed by farming groups as a sign that some in the retail sector are finally hearing their concerns.

The supermarkets use cheap milk to attract customers. Chains such as Asda and Morrisons have sold four-pint containers for £1, a price at which the suppliers say they cannot make money. The pressure group Farmers for Action estimates that dairy farmers need to sell their milk for around 30p a litre just to break even.

“As dairy farmers are under pressure, we guarantee to pay our farmers the highest market price for every pint of milk we sell,” said Booths’ chairman Edwin Booth. “Paying the highest market price means family farms are able to keep going, invest in the future and spend more time and money looking after their herds to ensure they produce great quality milk.”

Under the scheme, a farm in each of four of the counties will receive the agreed rate. The market price is established by an independent price comparison consultancy, milkprices.com, which monitors the farm gate prices of the major UK supermarkets. Booths has pledged to review the market price regularly to ensure that it is paying its farmers more than its supermarket rivals.

Some will see the deal as little more than a cosmetic exercise. Muller Wiseman has been targeted by farmers groups for not paying what they believe is a reasonable price.

Chris Dee, chief operating officer of Booths, said it was about sending the right signals to retailers. “We are trying to do what we think is right,” he said. “We are not suggesting that we will be able to make that much difference. It is symbolic. But it does demonstrate that there is a supermarket out there who will pay top dollar and the farmers do genuinely believes it makes a huge difference to them.

Dee said it made good business sense for Booths, too. “A lot of our stores are in rural areas. Dairy farmers are our customers.”

One of the dairy farmers to benefit from the deal, Christopher Dodd, who farms in Cheshire, said that a higher farm gate milk price would enable his business “to expand and buy cows and dairy accommodation to provide a sustainable financial future”.

His comments were echoed by another farmer to benefit, Roger Mason from Cumbria. “The opportunity to receive a high farm gate, long-term, sustainable milk price bodes well for us and other local farmers, giving us the confidence to invest and ensure a viable future both for ourselves and the next generation,” he said.

 

Source: The Guardian

 

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