Co-op to invest almost £1m in dairy farmers
Co-op is set to invest almost £1m in dairy farming as it increases the price it pays farmers for their products.
It is understood that a letter was sent to Co-op’s dairy farmers yesterday (6 March), explaining that the price paid for milk will move to the price set by dairy processing group Muller, or higher. Co-op has signed a long-term supply contract with Muller.
While the new price has not yet been set, as it is based on the market, this will see the convenience retailer making an additional investment of almost £1m.
The grocer had previously been using basket prices to set its milk prices, a system which has been in operation for nearly 10 years. During that time, it delivered nearly £55m in additional payments to members, according to Co-op.
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Co-op Food managing director Matt Hood said that while this milk pricing model has worked well over the past decade, “We recognise the need for its evolvement, as part of our continued commitment to farmers”.
“By working so closely with our British farmers, we understand the industry is facing many challenges, and whilst I know this won’t be a salve to all of those, we hope this increase in milk pricing goes someway to helping our dairy farmers,” Hood said.
Co-op Dairy Group (CDG) chair Tom Bramall added: “Dairy farmers value the relationship with Co-op and the announced movement on price is a positive step forward. The committee and I welcome the opportunity to have open discussion on how the pricing model can be improved to ensure the continued success of the Co-op Dairy Group (CGD).
“It’s also welcomed news that a long-term contract with Muller has been agreed which includes a stronger role for the CDG in decision making. We have achieved so much since the inception of the group and I know with continued co-operation, the group has a strong future.”
It is understood that the model will be discussed during Co-op’s committee meeting next week, outlining the next steps for a review.
