Morrisons is ramping up its support for British dairy farmers with a new dedicated milk supply group, new welfare commitments, and a pledge only UK farmers will benefit from the 10p a litre premium from its Milk for Farmers range.
The premium, previously shared across all of supplier Arla’s EU members, will now be distributed only among the new, 300-strong Dedicated Morrisons Dairy Group, which will supply the retailer with all of its liquid milk.
All members of the group will have to meet additional standards on animal welfare to qualify, and Morrisons has also created a “pool within a pool” of about 50 Arla farmers who will specifically supply the Milk for Farmers range.
This smaller group of direct suppliers would have to ensure (in a nod to the popularity of free-range milk) their cows are grazed outside for at least 120 days a year, and would benefit from an additional undisclosed payment, Morrisons said.
It comes on the eve of Milk for Farmers’ second anniversary, and represents a significant change for the brand, which has faced criticism in the past from some parts of the farming sector over Arla’s policy of sharing the premium with all its members across the EU.
In September 2015, Arla’s then UK boss Peter Giørtz-Carlsen told The Grocer the policy meant all members shared “the pain and the gain” of the supplier’s performance.
However, an Arla spokeswoman insisted this week it had not changed its policy, adding the decision to only pay UK farmers the supplement was in response to Morrisons’ requirement for “added standards”, which “always come at a cost”.
The changes will be reflected in new packaging and PoS, which roll out next week, carrying messaging highlighting the 120-day grazing pledge and how Arla distributes the premium to ‘selected British farmers’.
“Some customers want to pay more to support dairy farmers and when we listen carefully, some also say they also want to buy milk from cows that have been let out to grass,” said Morrisons head of trading for dairy Steve Newbould.
While 120 days was below the 180 days stipulated by the Pasture Promise free-range scheme, a Morrisons spokesman added it was a “good minimum step”, and was “achievable in different geographical areas around the country”, with many farmers expected to go beyond 120 days.
The announcement was welcomed by NFU chief dairy adviser Sian Davies.
She said: “It’s positive that Morrisons, by developing specific dairy production standards, have found a way of offering a bonus to British dairy farmers that comply with those standards. We know that British consumers want to buy more British dairy products and want to support our hard working dairy farmers - and this scheme is another one that allows them to do so.”