Dairy Crest puts price of milk up for shopkeepers

Milk giant Dairy Crest is raising the price of the milk it supplies to shopkeepers by 4p a litre – while cutting the amount it pays farmers.

The company – which made a £10.1m loss last year – is increasing the price to shops, while cutting 1.65p a litre from the the farm gate price.

Jeremy Lowe, NFU dairy advisor, said: "This just sums up the big difference between being a price maker and a price taker and it will outrage dairy farmers."

But today Dairy Crest said it was working on plans to offset the impact of milk price cuts on farmers.

The group said measures would include the introduction of a new code of practice for milk supply contracts.

Dairy Crest is appearing in front of MPs today to face questions on the crisis.

The group said its milk price cuts had "put pressure on our supplying farmers and we are working with them on plans to reduce the impact of these cuts".

In May, the firm cut 2p a litre off the price it pays to farmers who supply its milk, and will impose a further cut of 1.65p per litre on August 1.

Farmers will receive around 26p per litre – while spending 30p to produce it.

Colin Gornall, commercial director for Dairy Crest, blamed cost pressures. The company will also add two pence to the cost of UHT milk and cream and 10 per cent to the cost of eggs.