Page last updated at 12:50 GMT, Sunday, 21 March 2010

Asda cuts 200 farmers from milk supply pool

Milking cow
Dairy farmers say their profits will be hit hard by Asda's decision

Supermarket group Asda has dropped 200 of the 500 dairy farmers who supply it with milk - cutting their income by thousands of pounds a year.

The supermarket secures all its liquid milk from food company Arla and the farmers supplying Asda specifically get an extra 1p per litre bonus.

Asda said it was cutting its pool of dedicated farmers from 500 to 300 because of oversupply.

Farmers in North Yorkshire said they would lose about £5,000 a year.

Asda told BBC Radio 4's Farming Today programme that it had had to reduce the number of dedicated farmers because it had more milk than it needed.

It basically means there will be no future investment at this farm - that will be it
David Brown, North Yorkshire farmer

The changes would provide more opportunities for the remaining farmers, it added.

Letters were sent earlier this month advising those affected that their contracts would be amended from 1 April.

David Brown, a dairy farmer based near Harrogate in North Yorkshire, said: "We got a letter saying Asda have been looking at the dedicated farmer pool and they have reduced it and unfortunately we will no longer be supplying milk to Asda.

"It means I am going to lose somewhere in the region of £5,000 a year.

"It basically means there will be no future investment at this farm - that will be it."

'Gut-wrenching'

It is understood that a range of criteria were used to choose which farms were removed from the pool, including location and the farmer's "commitment to the partnership", as demonstrated by the attendance record at Asda/Arla farmer meetings.

Mr Brown said: "I was told it was because we didn't go to the meetings which Asda organised for us.

"I said that's not correct because I have gone to as many of these meetings as possible. I missed one because I was on holiday and a few because we had cows calving that morning."

Mark Smith, a dairy farmer in Nidderdale, North Yorkshire, said the news that he was being dropped from the Asda pool was "gut-wrenching".

He produces about 500,000 litres per year from 75 cows so the Asda bonus was worth about £5,000 a year.

The loss of the bonus would take his profits below the cost of production, he said.



Print Sponsor


SEE ALSO
EU boosts aid for dairy farmers
19 Oct 09 |  Europe
Who makes money from a pint of milk?
19 Jun 09 |  Magazine

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites

FROM OTHER NEWS SITES
Farmers Guardian Agriculture in the national news - March 23 - 58 mins ago
International Supermarket News Asda Are Oversupplied With Milk in the UK - 10 hrs ago
Mirror.co.uk Asda axes 200 dairy farmers - 11 hrs ago


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific