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28 July 2012 | Adam Leach
The major dairy companies have bowed to pressure from angry suppliers have ditched or postponed their plans to cut the price they pay for milk.
Co-operative First Milk was the first to withdraw its plan to cut the amount it paid its liquid milk suppliers by 1.7 pence per litre (ppl).
Kate Allum, chief executive at First Milk, said in a statement: “Dairy farmers have spoken with one voice over the last few weeks, and they’ve made it clear that they reject the existing model where they are price takers and favour working together to gain an equal seat at the negotiating table. It is therefore critical that the whole dairy supply chain now looks to develop better structures and relationships for the short, medium and long term.”
Dairy Crest followed soon after, announcing it would postpone its planned cut of 1.65 ppl, due to come into effect on 1 August, described by the NFU as a “stay of execution”.
Today, Arla has abandoned its planned 2 ppl cut, citing “an unprecedented two weeks of activity within the industry”.
And Robert Wiseman has also announced it will cancel the planned 1.7 ppl cut in the price it pays its suppliers. “We have been engaging with our customers with regards to the exceptional circumstances facing the supply chain and the need for urgent and significant support. From our discussions to date, we are confident this support will now be demonstrated,” a company statement said.
The change of heart from the companies follow weeks of protests and campaigning from milk suppliers angered by the proposed cuts to what they are paid through milk supply contracts. The farmers have staged protests outside a number of supermarkets - the large milk companies’ biggest customers - across the country.
David Noble, CEO of CIPS, said: "Getting the best from your suppliers is crucial for business but it doesn’t always mean securing the lowest price as there are other important factors at play such as reliability and quality. Those companies that have a two-way honest relationship with their suppliers will get the best value.
Having a good relationship with your suppliers ensures any problems are nipped in the bud early, and when times are tough suppliers can keep businesses going so there has to be give and take on both sides."