Onus on Retailers to React to Food Chain Failures

NFU Scotland is calling on all major retailers to react to the continuing dysfunction in many food supply chains or run the risk of further farmer demonstrations this autumn and winter.

On Thursday evening, farmers blockaded a Tesco depot in southern England in protest over continued poor milk prices being received by farmers.  Tesco has an industry leading milk contract in place paying those who supply it with its own label liquid milk one of the highest milk prices available.   However, the UK’s largest retailer has no similar arrangement in place for those who supply it with the rest of its fresh milk, cheese, butter, yoghurt and dairy deserts.

The Union has been in dialogue with a number of retailers this week and will address other supermarkets at the start of next week.   While the current focus falls on the supply chains for milk and dairy products, there is a growing need for supply chains across a number of sectors to be improved – something that European and UK legislation may help address in the future.

NFU Scotland President, Jim McLaren said:

"Faced with a winter of spiralling costs and unsustainable milk prices, frustration amongst dairy farmers is reaching boiling point.   That anger is justifiably focussed on a dairy supply chain that continues to poorly serve those at the milk production end.   With the price of feed, bedding, fertiliser and fuel all on the way up, it now costs a farmer almost 28p to produce a litre of milk, yet the average farmgate price that they receive for their milk sits below 25p per litre.

"Major supermarkets, as the key marketplace for the majority of fresh milk and dairy products produced in the UK, are making considerable amounts of money out of milk, cheese, butter and the like as clearly shown in DairyCo's most recent study of dairy supply chain margins.  Major retailers have it within their gift to ensure that a fair share of that profitability is available to go back down the chain to those who are milking cows, day in day out, without the need to ask the consumers to pay any more for their food.

"In recent days, NFUS has received correspondence from Tesco and met with Sainsburys.  In the coming days, we will meet with Morrisons and Asda and the dysfunctional dairy supply chain is at the top of the agenda.  While the injustices within the dairy supply chain are clear and transparent, we are making the point to all major retailers that there is a pressing need for supply chain relationships across all products and sectors to improve. 

“We are fully engaged in the debate at a European level where discussions on the functioning of the EU Food Supply Chain are gaining momentum.  Together with the other UK Farming Unions we are calling on Europe to deliver on important issues such as stamping out abuses of power, developing voluntary standard contracts and developing EU codes of conduct. That European work dovetails with legislative plans for an adjudicator for the retail sector in the UK due to be unveiled in the coming weeks.

"Retailers cannot continue to stick their heads in the sand over this issue.  Continually squeezing the primary producer will only heighten tension, see more choosing to leave the industry and add to frustration and that is not in the interests of retailers, processors, farmers and consumers.  Unless retailers start to address the issues then further protests of the kind seen last night are a distinct possibility."

Notes to editors


Contact Bob Carruth on 0131 472 4006

Date Published:

News Article No.: 145/10

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