Tesco slashed the price of milk. Here’s how dairy farmers have responded
Dairy farmers have accused Tesco of sparking a price war with its supermarket rivals that will cause further damage to an already fragile dairy industry, after the retail giant slashed the price of milk.
Britain’s biggest food retailer delivered a fresh broadside in the battle for customers’ loyalty after cutting the price of a four pint milk today from £1.39 to £1 – a 29 per cent reduction.
The move comes a week after Tesco pledged to reduce the number of one-off promotions and invest £200m instead in lowering the prices of everyday items, in a bid to revive sales counter fierce competition from discounters as well as Asda.
The supermarket giant said that the price cuts made to milk as well as carrots, onion, peppers, tomatoes and cucumbers mean that shoppers buying those items each week will save more than £100 over a year.
Tesco said the new lower price for milk “has no impact” on the price Tesco pays to the 650 milk farmers who supply the grocer, adding that the price is set independently twice a year.
John Scouler, Tesco's commercial director, said the supermarket's pledged to pay farmers a "fair and independently agreed price for their milk, so they can invest in the future of their farms and provide higher welfare standards for their cows."
But David Handley, the chairman of the lobby group Farmers for Action, blasted the move, saying it would add further pressure on the industry and was likely to cause other supermarkets to follow suit, “like a deck of cards”.
We are disgusted by what Tesco has done and it clearly shows that they can’t be trusted. They are taking advertisements out in newspapers saying that they support British farming but here they are taking a top quality product that we have to jump through hoops to produce for them and go and devalue it like they have.
The reduction means Tesco’s milk is now priced that same as Aldi and Asda, which lowered the price of milk in 2012, leaving Morrisons, Sainsbury’s as well as Ocado and Waitrose still offering four pints of milk for £1.39.
Morrisons said it did not comment on future price cuts but added that it offers three four pint bottles for £3. Sainsbury’s was not immediately available for comment on whether it would follow with price cuts.