Arla has become the first UK dairy company to offer a milk supply contract to farmers which fully complies with the dairy industry’s code of good practice.
The new Arla Direct contract has been launched by the Lurpak, Anchor and Cranvendale brand owner as part of its drive to secure an additional 500 million litres of milk within the UK. Farmers new to Arla are being offered 30.02ppl for their milk under the contract.
The code was agreed in September last year between the NFU, NFUS and Dairy UK. It includes provisions designed to bring fairness and stability to farmers’ contractual relations with milk buyers. For example, it provides for a farmer to terminate his or her supply contract on three months’ notice if they disagree with a change to their milk price or changes in other contractual terms.
The contract offered new Arla milk suppliers a long-term premium milk price and the security of supplying milk to a farmer owned cooperative that is investing in the future of the industry, said Ash Amirahmadi, head of milk and member services. “Since its launch in September, there has been plenty of debate around the code and Arla is fulfilling its commitments by introducing what we believe is the first fully compliant milk supply contract.”
NFU dairy board chairman, Mansel Raymond, welcomed the contract launch as an important first step, and urged “all other milk buyers to fundamentally review their milk supply contracts to ensure full compliance with the Dairy Contract Code.”
Arla is also working to ensure all existing farmer-supplier’s contracts are fully compliant with the code.
New recruits also have the choice of Arla’s existing Arla Foods Milk Partnership contract, designed for those members who aspire to become members of Arla Foods amba.
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