In an effort to address what farmers have described as their “state of emergency,” Asda has moved to pay dairy workers more for their milk – a level that will "assist" farmers, theguardian.com reports.
The UK-based Walmart subsidiary will pay £.0.28 per litre of milk. The average figure farmers receive for this in the UK is just under £0.24.
Commenting on how this will affect the UK’s FMCG price war, Alex Bandini, Kartar Worldpanel’s strategic insight director for dairy trading, said, “Retailers use lower prices for everyday staples to give the perception of value for money, so it could be difficult for them to pull back quickly from current pricing strategies.
“While we can expect to see retail prices stay down in the coming year on standard supermarket milk, it’s too soon to say what impact Morrisons’ Milk for Farmers brand will have on the market and whether other retailers will follow the same approach.”
An Asda spokesperson stated, “We have confirmed to our milk supplier, Arla, that we are increasing the price we pay per litre from Monday to a level that will assist our farmers during the current crisis. Asda’s origins are in dairy farming which is why we are acting in the best interests of our farmers and our customers by increasing the price we pay, introducing the Farmer’s Marque label and not passing on any of the costs to customers – our retail price stays the same.”
© 2015 European Supermarket Magazine – your source for the latest retail news. Article by Peter Donnelly. To subscribe to ESM: The European Supermarket Magazine, click here.
