Supermarket giant Tesco will pay its preferred group of milk suppliers more for every pint it buys from the beginning of next month. Farmers will get 28.18p per litre, up 1.28p on the previous price, although you'll have to be a member of the Tesco Sustainable Dairy Group to feel the benefit.

Tesco Board Director, Lucy Neville-Rolfe said: “We remain committed to ensuring British dairy farmers receive a fair price for the milk they supply to Tesco that is above the cost of production.

"This new price remains considerably above the current market value and reflects the transparent way we work with the dairy industry.

"The Tesco Sustainable Dairy Group also makes additional provisions for making a profit, including capital investment and unpaid family labour. This is essential for the long term future of the British dairy industry.”



Only yesterday, Scottish dairy firm Robert Wiseman issued a profits warning as competition hurts business. The group, which supplies about 30% of the milk consumed in Britain every day, said £7m will be skimmed off operating profits in the second half of the year to 2 April 2011. Tesco pointed out that it was paying far more than the average 25.77p a litre offered by rival supermarkets. Chairman of the NFU Dairy Board Mansel Raymond called the move "extremely encouraging".

An independent review of milk farming said there was a need for higher prices to offset increases in the cost of cattle feed.