FMPLiquid Milk

NMA Highlights Discounting as a Threat to the Sustainability of Specialist Fresh Milk

IFA National Liquid Milk Chairman John Finn has said the 2017 report by the National Milk Agency, published this week, highlights the role of retail practices when it comes to keeping specialist fresh milk producers viable, and securing domestic drinking milk supplies.

He said this is a welcome recognition, and warned that the current spate of unsustainable discounting, driven by Aldi despite its recently acquired Origin Green membership, does threaten the long-term security of fresh milk supplies.

“NMA Chairman Denis Murphy states in the 2017 report that he has contacted all retailers expressing the Agency’s grave concern that the discounting of fresh milk by some retail multiples is undermining the viability, sustainability and security of the fresh milk supply chain. He states that retail price discounting is devaluing fresh milk and squeezing the economic value needed to adequately pay fresh milk producers to sustain their year-round supplies for liquid consumption,” Mr Finn said.

“We in IFA share this analysis and have criticised Aldi and other retailers who engage in unsustainable discounting with the sole aim to improve market share, at the expense of all others in the chain, especially farmers. Farmers can clearly see the cynicism of these recent members of Origin Green, who publicly espouse alleged values of sustainable sourcing and social responsibility,” he said.

“Also, the NMA 2017 annual report outlines the results of a producer survey carried out last summer, which shows that on average, only 37% of specialist producers’ supplies are contracted for liquid milk, while 72% have increased their creamery/manufacturing milk supplies, with the majority planning to produce more creamery milk. Over time, it is clear that as farmers opt to lift manufacturing supplies, the economic sustainability of their relatively dwindling winter and year-round contracted fresh milk supplies will come into question in farm management decisions,” he said.

“Retailer behaviour, and their engagement with Unfair Trading Practices such as unsustainable discounting, must come under scrutiny and be stamped out, especially when they claim to espouse Origin Green values. The long-term sustainability of fresh milk supplies for Irish consumers, especially as Brexit may reduce the already falling import option, depends on this,” he concluded.

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