Farming News - More supermarkets join milk price war
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More supermarkets join milk price war
More major retailers have joined a price war, begun by Tesco last week. After slashing the price of a range of fresh produce, including onions and carrots in late February, Tesco cut the price of its four litre milk bottles from £1.39 to £1 on Monday.
Although Tesco said the impact of its price cuts would not be passed on to farmers in its dedicated supply group, the move still angered dairy farmers. They warned that other retailers, whose suppliers may not have the same protection, would be likely to follow suit.
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Waitrose joined Tesco on Thursday, announcing it would cut the price of its four litre bottle to £1 for its cardholding customers and the Co-operative announced price cuts on milk, but stopped short of bringing its four pint bottles down to £1. On Friday, Morrisons entered into the fray, cutting the price of two litre bottles from 97 pence to 84p.
This latest move brings the price of a pint of milk to 24p at Morrisons, 1p below its rivals in the price war. Morrisons also moved to assure its suppliers that cuts would be absorbed by the company, and not passed on to farmers.
Sainsbury's is now the only major retailer which has yet to act, as Asda already sold four litres of milk for £1 before Tesco's announcement earlier this week.
Farming groups have reacted strongly to the Supermarket cuts. The NFU said the price war has the potential to devalue food in consumers' eyes and "undermine British farmers and growers' businesses."
Newly elected president Meurig Raymond said on Thursday, "We recognise that it is an incredibly competitive retail environment and that many retailers, including discounters, had already lowered the cost of staple items, such as milk, before this week's announcement by Tesco. While Tesco has been quick to point out that this latest price promotion will not impact on farm-gate prices, we are never-the-less concerned about the impact of a price war having an undermining effect on farm gate prices and so we will be monitoring all retailers, to ensure that these price promotions do not get passed back to the farmer."
Mr Raymond continued, "What we want to see is decisions on pricing that ensures the longer term sustainability of food production - enabling continual growth and investment in the raw material production so that we are able to grow, innovate and provide choice to meet future consumer demand."