The supermarket chain that pays the highest price for milk in the industry has said retailers have a “responsibility” to look after suppliers in the midst of a bruising row between farmers and grocers over dairy pricing. Booths has committed to paying the highest price to suppliers for their milk, and Chris Dee, chief executive of the Preston-based grocer, said: “There is no point squeezing suppliers until they go bust” and that there had to be “give and take” in the relationship between retailers and farmers.
Aldi, Lidl, Asda and Morrisons agreed last week to increase the amount they pay for milk after farmers blockaded distribution centres and brought cows into supermarkets in protest at the price they were receiving. The National Farmers Union said there was a “state of emergency” in farming after a 25% fall in the farmgate price of milk in the last year, which means it is below the cost of production for many farmers.
Dee’s comments will add to the pressure on the largest supermarket
chains, with further protests likely from dairy farmers.
Since 2014, Booths has committed to paying a price for milk that is above the cost of production and higher than its rivals. Booths, which has 32 stores in northern England, pays 33p a litre to farmers, considerably higher than the industry average of 23.66p. Sales of the family-owned company’s Fair Milk have risen by 5% in the last four weeks, well above the 0.3% growth for the industry as a whole.
Dee said that Booth’s Fair Milk initiative represented a “multimillion-pound investment every year”. He added: “We take the view that all businesses have a responsibility. It is important we find a way to make it economically sustainable [for suppliers]. There is no point squeezing our suppliers until they go bust. As a supermarket operator, our primary role is to serve customers. They want to trust us, and trust that we are dealing with our supply chain in the right way. There has to be some give and take on price. There are likely to be good times and bad times.”
Dee said that the fact Booths stores were based in rural communities “keeps us honest”. He added: “We see farmers not just as suppliers, but customers. We have shops in rural towns. That means farmers have to make a profit, and we recognise that. Otherwise we would be the bad guys in town.”
