Farmers carry the burden of ‘destructive fresh milk price discounting’

Unsustainable discounting of fresh milk by Iceland and Aldi in recent weeks is socially irresponsible and is putting a complete supply chain of fresh, perishable food in danger of being decimated in the Republic of Ireland, the Fresh Milk Producers group has warned.

The group’s chairman Jim Mulhall, a liquid milk supplier to Glanbia from Kilkenny – said: “Aldi is currently selling fresh milk at €1.30 for 2L. Iceland is also offering a deal of 4L of milk for €2.60.

“At this price point per litre, the supply chain can not support a sustainable price to pay the primary producer. While retailers may claim to bear the burden of below cost selling, history has shown us the opposite will ultimately happen, with price cuts ending up on the door of the farmer.

We have seen this in other fresh food products such as in the vegetable sector, where these unsustainable discounting practices have resulted in unviable margins in this sector and we will not sit back and watch this happen to our product.

Continuing, Mulhall said: “In much of the retailers’ promotional advertising, claims to have developed a plan that includes sustainable sourcing and emphasis on social responsibility are promoted.

“But any fair-minded person can see that this aggressive undermining of the value of fresh milk through destructive discounting is neither sustainable nor socially responsible.”

In addition, Michael O’Flaherty, a FMP member, highlighted: “The supermarkets have thousands of products to make a margin on, but the only product we have to sell and make a living from is the one they choose to target.

“We hope that Aldi’s and Iceland’s behaviour will be seen by farmers for what it is – a nakedly cynical attempt to build up market share, while masking their irresponsible actions behind positive PR.”

Mulhall concluded: “Retailers make a lot of use of farm and farmer imagery in their promotional material and within their stores.

“It is clear that those messages have neither coherence nor credibility and I believe that all retailers must prove to farmers just how genuine their commitment is by living up to these messages and end unsustainable discounting.”