The row between dairy farmers and Arla Foods intensified this week, after the processor refused to reverse its 0.35ppl cut in milk prices (The Grocer, June 11, p64).
Arla met officials from Farmers For Action and the National Farmers’ Union on Tuesday and told them the price cut was justified and would remain in place.
After the meeting the FFA vowed to keep putting pressure on Arla to raise milk prices. Chairman David Handley immediately called on FFA members to picket the company’s Ashby and Sheffield Park plants on Wednesday night.
The company’s key retail customers would be targeted next, with Asda top of the hit-list, warned David Handley.
The stakes for Arla boss Tim Smith could barely be higher. This is his first month in the job as chief executive, and to back down now would be seen by retailers and the City as a major sign of weakness.
In a statement, Arla said: “We made it clear that we were not going to rescind the 0.35ppl reduction in price from June 1.
“We consciously held our price beyond the April 1 date we had originally set. This left us commercially disadvantaged over the whole of the period from December 2004 to the end of March 2005, but helped create the stability that helped liquid milk processors deliver increased prices reflecting cost increases for both processors and producers.
“Given that the reduction was to correct that commercial disadvantage, there is no need for our competitors to reduce their price.”
Chris Walkland