9 March 2006 - ASDA announced today it was slashing the price of milk in stores across Great Britain* while increasing the amount it pays its own farmers.
In recent weeks farming leaders have been calling on supermarkets to come clean and 'say what they pay' their farmers. The supermarket's latest move is designed to give both customers and farmers a better deal.
ASDA is also challenging other retailers to adopt the NFU's Vision for the Dairy Industry, which the supermarket has already signed up to, and is today launching its own Four Pint Pledge on behalf of dairy farmers (www.asdafourpintpledge.co.uk).
The ASDA Four Pint Pledge:
• Supermarkets should set up dedicated supply arrangements such as those already in place at ASDA, Waitrose and M&S
• Supermarkets should publicly publish the price they pay their farmers
• Supermarkets should invest their own margin when lowering prices
• Supermarkets should adopt the NFU's Vision for the Dairy Industry.
The dairy double whammy means from today customers will pay less for a pint of ASDA fresh milk - one pint now costs 32p (reduced from 33p), two pints cost 53p (was 64p), four pints cost £1.00 (was £1.16) and six pints cost £1.50 (was £1.69) - in addition all of ASDA's 550 dedicated farmers will get paid more for every litre of milk they produce for ASDA.
The ASDA Farmer Partners already receive a 0.5p per litre premium for supplying ASDA, this will now double to 1ppl*. ASDA's farmers are also set to benefit from an increase in demand for their milk - the price drop, backed by a multi-million ad campaign, will encourage customers to buy millions more pints in the coming weeks.
The retailer is launching its first ever milk TV ad next week (16th March), highlighting that unlike other big supermarkets, ASDA can trace all of its milk back to its own farmers. It is also taking out national press ads in major newspapers tomorrow to promote its price drops and its Four Pint Pledge.
Chris Brown, agriculture strategy manager said: "By having a group of dedicated farmers who supply all our British milk, we're able to pay them more and still charge our customers less.
"We're open about the price we pay our farmers, while our competitors prefer to keep their prices under lock and key. We reckon our lower milk prices, together with the multi-million pound ad campaign we're launching, will dramatically increase the amount of milk we sell. And every extra pint we sell will directly benefit our farmers."
But while the price cut is good news for customers ASDA understands some dairy farmers will have concerns.
Chris added: "Most other retailers don't have dedicated supply arrangements and will find it hard to cut the price of milk without cutting the price they pay to their processors, and in turn farmers. That's why we're urging other retailers to adopt our four pint pledge.
"Any store which reduces the retail milk price without first meeting these challenges will have serious questions to answer from farming leaders. As our move shows, only a long-term win-win partnership with farmers can bring about a fairer distribution of costs in the milk supply chain."