22p a pint! Store wars drive milk to a record low

THE price of milk has fallen to just 22p a pint thanks to a f i erce war between supermarkets.

Farmers have warned the UK dairy industry faces extinction if retailers continue to drive down the price – now at its lowest level in seven years.

Asda, Aldi, Lidl and Iceland are selling four pints of milk for just 89p, while Tesco, sainsbury’s and waitrose are not far behind at £1.

Pint f or pint, milk i s now cheaper than mineral water in most supermarkets.

Retailers insist they are funding the cost of the price reduction from their own profits, rather than paying farmers less. Many supermarkets have guaranteed the price farms receive will stay above the cost of production.

But farmers say the price war is also devaluing milk as a product at a time when they are under unprecedented pressure.

They are worried smaller shops without fair deals in place will try to match supermarket prices, driving down the cost further.

The global price of milk has collapsed in the past three months, meaning British farmers also receive less for milk they export.

some are now being paid less than 20p a litre (11.4p a pint) – the lowest price in a decade and far lower than the sum it costs them to produce the milk.

Mike Gorton, 58, who milks 70 cows in Cheshire, said: ‘Last year I was getting 31p a litre – now I am getting less than 20p. It costs me 24p a litre to produce so I am losing money fast.’

The father of two said he is furious that supermarkets have become engaged in a price war at a time when farmers are strug- gling to make ends meet. ‘They are playing games, devaluing the product I am working 14 hours a day to produce,’ he said.

The number of dairy producers in england and wales dropped below 10,000 for the first time last year, down from 20,000 in 2001.

George Dunn, chief executive of the Tenant Farmers Association, warned traditional farmers who feed their cows on open pasture were most at risk of going out of business. He said: ‘People are being pushed into big, indoor, intensive systems … consumers don’t want that – they want to see cows in open fields.’

Tesco, sainsbury’s, waitrose and Marks & spencer pay a pool of farmers a guaranteed price for their milk, rather than buying it on the open market.

Other supermarkets, including Asda, Aldi, Lidl and Morrisons, buy their milk from large cooperatives and processing firms who pay farmers a fixed price.

At the Oxford Farming Conference, environment secretary elizabeth Truss said she would do all she could to help dairy farmers stay in business.

Last night, s upermarkets defended their policies. spokesmen for Asda and Iceland maintained that they had absorbed the cost of the price cut for customers, and not reduced the amount paid to suppliers.

Lidl also said it ‘absorbs the costs of any market-led price reductions’. An Aldi spokesman said it ensures a fair deal for milk suppliers by ‘paying an amount above the farm gate price’.

‘Devaluing the product’