Morrisons has been slammed by farmers for engaging in a price war with Asda over milk, bringing the price of four pints down to 98p.

The move means that Morrisons is now selling milk at 2p lower than Asda, which yesterday cut its price for four pints from £1.18 to £1.

Morrisons yesterday took out full-page ads in the national press advertising four-pint bottles of semi-skimmed milk. The banner running across the top of the ad read: “Great low prices for Great Britain.”

The supermarket’s move infuriated farmers already angry at the retailer because it does not have a ‘cost of production’ payment model in place for paying the farmers who supply it with fresh milk.

They face respective cuts of 2p per litre and a 1.65ppl to their milk price from Morrisons’ milk processors, Arla and Dairy Crest.

Andrew Hemming, vice chairman of Farmers for Action, said retail price wars eventually had an negative impact further down the supply chain – which he said was evidenced by the recent milk price cuts.

“Is the processor standing the price cut? Is the retailer? Obviously not – it’s coming back to the producer,” he said.

Earlier this week, Asda announced a 2ppl increase in the premium it pays farmers – to 3ppl – above the price farmers are paid by Arla. But farmers emphasised it did not take their total milk price above the cost of production.

Last night, Hemming spearheaded a protest by more than 400 farmers outside Arla’s Ashby-de-la-Zouch liquid milk processing site.