Morrisons is changing the packaging on its Milk for Farmers range to make it clearer to shoppers that extra money generated through the brand will be passed back to Arla farmers across Europe and not just in the UK.
It comes after the retailer faced criticism because its liquid milk supplier, Arla, is a pan-European co-operative that distributes extra payments to all its 13,000 farmer members across Europe and not just those in the UK.
Morrisons fresh trading director Alex Brown told the Efra committee of MPs on Wednesday (16 December) that Morrisons had initially approached Arla to ask if it could limit payments to British farmers, but was told the co-op was legally obliged to share the payment with all its farmer members.
To make sure consumers were clear on this, Morrisons had “altered the label on the back [of bottles] following two pieces of customer feedback that we weren’t clear enough”, Brown said.
The new labels would be in-store in the new year, added a Morrisons spokeswoman, and would include Arla’s Farmer Marque logo as well as a clearer explanation of the scheme’s beneficiaries.
Milk for Farmers was launched by Morrisons in October in the wake of famer protests over low milk prices to allow consumers to pay a bit extra to support farmers. The range guarantees to pay an extra 10p per litre back to farmers.
£900,000 for farmers by year-end
Brown also revealed Morrisons will have passed back about £900,000 in extra payments to farmers before the end of the year from its Milk for Farmers brand, and plans to launch additional SKUs in 2016.
The brand now represents about 10% of the retailer’s total milk sales and sells five times as much as Morrisons’ organic milk range. Morrisons plans to launch a skimmed milk variant in the new year, and was “looking at other [milk SKU] sizes” for the brand, Brown said.
In November alone, Morrisons paid out a total of £384,000 in extra payments based on sales of the brand’s products, representing more than 1.5m bottles of milk and 50,000 blocks of Milk for Farmers Cheddar. It paid Arla farmers £366,756 extra for the milk variant, and £17,291 to Lactalis farmers for the cheese variant.
“Early sales have been encouraging and well above our internal forecasts,” said Morrisons dairy category director Rick Bourne. “Milk for Farmers milk and Cheddar is providing a meaningful extra source of revenue for dairy farmers thanks to our shoppers.”
It comes just over a week after Morrisons announced it was following Iceland’s lead by increasing the retail price of a four-pint bottle of own-label milk from 89p to £1, and the price of a four-pint bottle of Milk for Farmers from £1.12 to £1.23.
Arla has previously suggested the range could return £5m to farmers within a year if sales continued at launch rates.
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