Müller has warned further blockades of its processing sites by protesters could lead to milk not being collected from its farmers.
The processor has become embroiled in an increasingly bitter war of words with protest group Farmers for Action over its milk pricing policy after holding its standard milk price for September at 18.66ppl. It warned in a letter to farmers today (11 August) that it was unable to guarantee it could maintain its milk collection service if it faced more protest action.
FFA blockaded Müller’s Market Drayton plant on Sunday and is planning further action at various sites tonight.
Apologising to customers for any inconvenience, Müller group CEO Ronald Kers today defended the processor’s pricing policy, and insisted the dairy giant offered farmers “a fair and competitive” milk price.
“We will do everything we can to maintain our milk collection service to you - but under these circumstances this cannot be guaranteed,” he said. “I therefore want to alert you to the possibility of delayed or missed collections in advance.”
FFA chairman David Handley said the dairy giant’s decision to hold its price at a time when rivals were increasing theirs and the dairy market was exhibiting signs of recovery showed “no corporate responsibility or any respect for their hard working non-aligned producers”.
Müller’s decision this week to raise its formula milk price by 1.1ppl for aligned farmers in the Müller Milk Group and Direct Milk DPO was branded a “disgrace” by Handley, who claimed it vindicated the FFA’s blockades in support of non-aligned Müller suppliers.
But Kers insisted that while the price increases initiated by Müller’s rivals were headline grabbing “they are only moving these competitor milk prices closer, on an average basis, to the price we pay you, our farmers”.
He added that Müller’s average price between October 2015 and September 2016 was 20.8ppl for non-aligned farmers, climbing to 22.9ppl when additional retailer supplements were taken into consideration. This compared to an average of 20ppl for some of Müller’s main rivals, he claimed.
“Our farmers on non-aligned contracts receive additional support as a result of the customers we supply,” Kers said. “We offer a competitive standard milk price and in addition a retailer supplement. We show this supplement separately to be transparent, so that you can see how it benefits your total monthly price paid.”
This was a very different approach from Müller competitors “who also receive this supplement from retailers but choose simply to incorporate it, and other retailer group premiums into their standard milk price, which is similar to ours”, he added.
“As a result your actual returns are significantly higher and we as a business are paying more for the milk that we buy. The fact that dairy markets are improving is very welcome news for us all. This will translate into higher milk prices. However, the timing is dependent on when we actually realise these higher returns within our business.”