Milk supplier to work with farming industry on impact of cuts

17 July 2012 10:27

Milk supplier to work with farming industry on impact of cuts

Supermarket supplier Dairy Crest has said that it is planning to implement measures to offset the impact of milk price cuts on farmers, including the introduction of a new code of practice for milk supply contracts.

The group, which is behind well-known brands such as Cathedral City, Clover and Country Life, is one of a number of milk producers that have slashed the price they pay farmers for milk after seeing the value of cream plummet this year.

However, farmers are warning the cuts will see them paid less than it costs to produce the milk, raising concerns that it will force many out of business.

Dairy Crest is appearing in front of MPs today to face questions on the crisis, alongside supermarket chain Asda and farmers' representatives.

The group said its milk price cuts had "put pressure on our supplying farmers and we are working with them on plans to reduce the impact of these cuts."

"These plans include the early adoption of a new code of practice in relation to our milk supply contracts," it added.

Dairy Crest confirmed its dairy division was also continuing to suffer from difficult market conditions, which saw the group slump to a £10.1 million loss in its last financial year.