UK Supermarkets Challenged Over “Effective Support” for Megadairies

Brussels— Today, consumer organization Food & Water Europe wrote to Asda, Morrison’s and The Co-op asking them to clarify their corporate policies on megadairies, asking if they sell milk as a loss leader and, if so, how they justified selling milk below cost — a trend that is crippling the ability of small- and medium-sized farmers in the EU to make a living and stay in business. The letters also suggest they are supportive of massive megadaries, which consolidate milk production into the small number of giant massive operations that can scale up to meet the challenges of providing cheap milk to retailers—but at a great cost to communities where these megadairies operate and consumers who want sustainable dairy choices that support farmer livelihoods.

“Consumers need to know if their favourite retailer is helping, behind the scenes, to create polluting megadairies and harm farmer livelihoods,” said Wenonah Hauter, Executive Director of Food & Water Europe. “We expect these retailers to clarify their policies about megadairies and justify selling milk as a loss leader.”

“The financial situation for dairy farmers across the EU is perilous, and many continue to go out of business. The reason they can’t stay in business is due to the way they are treated by processors and supermarkets,” continued Hauter.

The practice of selling milk as a loss leader piles additional pressure on farmers as supermarkets drive the farmgate price lower and lower while farmers’ costs of production are on the rise. “We have not noticed a commensurate drop in the retail price families pay for milk at the supermarket, so presumably the supermarkets are pocketing the difference. It’s time milk was valued properly and farmers paid a decent price for the hard work they do producing something we all have in our fridges,” said Hauter.

“As you may be aware, UK consumers are very hostile to megadairies, for very good reason. The continued practice of selling milk as a loss leader, coupled with repeated cuts in the price paid for milk in the first place, is undisputedly driving increasing numbers of UK small and family dairies out of business,” says Food & Water Europe in its letters to the retailers.

“All supermarkets need to change course urgently before the UK loses traditional dairy farming altogether. If that means supermarkets have to give up a tiny fraction of their profits, so be it. Anything else is artificial distortion of the market and comes at far too great a cost.”

Contact: Eve Mitchell – emitchell(at)fweurope.org, tel + 44 (0)1381 610 740)