‘Below-cost selling’ of milk undermines jobs and farm families

The chairman of the Fresh Milk Producers’ (FMP) association, Willie Lennon, has hit out at a Co. Cavan retailer that, he contended, had been engaging in below-cost selling, advertising 4L of milk for €2.00.

While the store, which has subsequently removed the advert from social media, had billed the move as doing its bit to help during the Covid-19 pandemic, Willie said that selling fresh farm produce as a loss leader undermined Irish jobs and farm families. He also expressed the fear that other retailers could follow suit.

“None of these are isolated incidents. They start with one retailer that drops the price and then others feel they have to follow suit. It’s like a forest fire as others feel they have to compete,” Willie said.

At a time when milk prices have dropped for last month’s milk and the indications are that further price drops might be expected, this price reduction was very cynical, the Goresbridge farmer contended.

In recent days a number of processors have announced milk price cuts for March supplies – ranging from 1.5c/L to 2c/L – including: Lakeland Dairies, Glanbia; Kerry; Dairygold; and Carbery.

The co-ops have equated the price drop to falling demand in key Irish dairy market destinations; however the country’s farm organisations have roundly criticised the moves.

Costs associated with production

“No matter what farmer produced this liquid milk, or which processor collected it, pasteurised it and bottled it to human consumption standards, it cannot be done without recognising the costs associated with producing it,” Willie said.

Selling milk, or other perishable farm produce, at below the cost of production is unethical in these challenging times. I would go as far as it to say it undermines the true value of good-quality, locally produced food.

A spokesperson for Smith’s Gala, Ballyconnell, told AgriLand that they had been taking the loss on the price of milk in an effort to do something for the community.

“We are taking the loss; no-one else. We’re here struggling like everyone else and have taken down the post. We have given away hampers in our local area and dinners, delivering them personally. We’re trying to do our bit.”