Blog: Supermarket milk prices are not only a moral issue

The milk price crisis continues to rumble on this week, but moves from both Asda and Morrisons prove positive for protesting dairy farmers.

Both retailers announced they are taking measures to help milk farmers; Asda will up the amount it pays its milk suppliers, while Morrisons has announced it will launch a more expensive dairy brand that sees 10p per litre of the retail price go directly to dairy farmers.

The two grocers have faced increased disruption and protests from farmers, who have herded cows through Asda stores and blockaded Morrisons’ distribution centre to draw attention to the fall in milk prices, and the treatment farmers have labelled unfair.

Campaigners say they are being paid less than the cost of production for their milk as supermarkets slash prices to better compete with the likes of Aldi and Lidl, and have called milk prices a “moral issue”.

This week’s announcement by Morrisons is particularly surprising after the retailer threatened protesters with legal action following a series of milk trolley challenges and protests.

But instead of continuing on the controversial track, the grocer has chosen to offer dairy farmers a compromise. Morrisons isn’t taking all of the responsibility though; by introducing a more expensive brand, the retailer is putting choice back into the hands of consumers.

The milk price crisis is not the makings of the large grocers or their discounting rivals; it is a basic question of supply and demand. There is excess milk in the UK market so the prices are falling.

But the consumer mood is unforgiving towards the grocers at present, and large, public protests by dairy farmers do nothing to improve the reputation of some of the UK’s largest retailers. According to the National Farmers’ Union, Waitrose, Marks & Spencer, Tesco, Sainsbury’s and the Co-op pay their farmers above the cost of production for milk, which is why Asda and Morrisons have been targeted in particular by protesters.

While Asda’s action applies to all the liquid milk it sells, Morrisons decision to introduce a new, more expensive brand from September will truly be a test of whether ‘moral’ issues such as this can ever compete with price in the eyes of consumers.