Archive: Morrisons to address impact of dairy price volatility

Published 9 October 14

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Morrisons is looking to incorporate a new mechanism in its milk supply contract to address fluctuations in the market, as it re-tenders for liquid milk supplies. The retailer is re-tendering for its liquid milk supplies as the current five-year contract for milk will come to an end in 2015. It states that any new liquid contract with its processor will include a mechanism to help the industry cope with wholesale price movements similar to those observed recently.

In March, at the same time as a number of other retailers, Morrisons lowered the retail price for milk in its stores and currently sells its Meadow Park value brand milk for 41ppl and its own-label milk for 61ppl (or 44ppl on a multi-buy offer). In its letter to the NFU, Morrisons states that, under the contracts it has with its processors, it has no direct control over the price paid to dairy farmers. No mention was made of the possibility of setting up a dedicated milk supply pool in the letter.