Asda has responded to recent dairy farmer protests by announcing it will pay its main fresh milk supplier, Arla, almost five pence per litre above its standard farmgate price.

The retailer announced on Thursday evening (13 August) it would follow Morrisons in offering a major concession to beleaguered dairy farmers and increase the price it pays Arla for fresh milk to 28ppl.

The Grocer understands dairy farmers supplying Asda were previously paid Arla’s standard on-account farmgate price of 23.01ppl. Asda will start paying Arla the higher price from Monday (17 August).

A spokesman for Asda said it was increasing the price it paid to “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,” added the spokesman, who also noted that Asda milk would carry Arla’s recently announced Farmer’s Marque label, and would not pass any additional costs to customers. “Our retail price stays the same”, he added.

The announcement follows a turbulent fortnight for the mults in the face of a barrage of farmer protests over the low retail and farmgate price of milk, with Morrisons bearing the brunt of action with a spate of ‘milk trolley challenges’ – where farmers emptied shelves of milk and gave it away to shoppers.

Asda also felt the fury of farmers last weekend, when farmers aped recent French protests by taking dairy cows into its Stafford store.

The protests led to a crisis meeting held by the main farmers’ unions on Monday, followed by a meeting between the unions and Morrisons on Tuesday. Following that, Morrisons announced the launch of a new milk brand, called ‘Morrisons Milk for Farmers’, which will launch this autumn and will pay farmers a premium of 10ppl on four-pint SKUs.

Positive reaction

Industry reaction to Morrisons’ plans have been mixed, with accusations of tokenism levelled at the retailer, but the early response to Asda’s announcement has been generally positive.

The NFU described Asda’s move as a “significant leap forward in recognising the true value of British dairy products”, adding that it expected the “extra funds expected to be passed on to its UK dairy farmers”.

“The NFU has been lobbying tirelessly for Asda to recognise the plight of the dairy industry so we are pleased it has moved to support farmers in their hour of need,” said NFU president Meurig Raymond.

“It is clear from Asda that this commitment is to support the UK dairy industry at a time of crisis,” he added, while urging Arla to ensure “this is delivered to British farmers on the ground, with immediate effect”.

His thoughts were echoed by Tenant Farmers Association CEO George Dunn, who said Asda’s announcement “marked a significant turning point in the dairy crisis”.