Arla promises Asda milk price rise goes ‘direct to farmers’

Asda has committed to using dairy co-op Arla’s new farmer-owned logo on all its liquid milk and own-label cheddar.

Britain’s third biggest retailer has followed up a promise last week to raise the price paid to the processor to 28p/litre.

All Asda’s milk will carry the marque from the autumn. The cheese will also carry a “Made with British Milk” claim, highlighting how the supermarket sources all its cheddar from UK farmers.

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Arla launched the badge a week ago, with the aim of committing retailers to a market-based milk price, long-term commitments and tools to manage volatility.

Asda president and chief executive Andy Clarke said his company was formed by farmers and took that heritage seriously – the firm’s roots stretch back to a group of Yorkshire dairymen in the 1920s.

“That has informed our decision to make a substantial move to support farmers during the current global milk price crisis as well as agreeing a longer-term package of measures going beyond liquid milk,” Mr Clarke said.

Arla has confirmed Asda’s higher milk price will be shared directly with the 13,500 European farmers-owners, including 3,000 in the UK.

Farmer board director Jonathan Ovens said Asda had shown leadership in driving a solution to the industry’s challenges.

“As Arla farmer owners, we asked our major retailer customers to support our responsible sourcing principles and our transparent co-operative model,” he said.

“Asda has a market-driven wholesale price, mechanisms in place to deal with volatility and an ongoing long-term commitment for farmer owners, like myself.”

The NFU welcomed Asda’s milk price increase, with president Meurig Raymond demanding it was delivered to British farmers with immediate effect.

But Arla’s co-operative rules mean revenue from each of its seven countries are pooled and profits shared across Europe.