IFA: Unsustainable Discounting Threatens Long-Term Security Of Fresh Milk

The Irish Farmers’ Association has warned that the current spate of unsustainable discounting driven by Aldi threatens the long-term security of fresh milk supplies.

IFA National Liquid Milk Chairman John Finn welcomed the 2017 report by the National Milk Agency (NMA), which highlights the role of retail practices when it comes to keeping specialist fresh milk producers viable.

Unsustainable Discounting

“NMA Chairman Denis Murphy states in the 2017 report that he has contacted all retailers expressing the Agency’s grave concern that the discounting of fresh milk by some retail multiples is undermining the viability, sustainability and security of the fresh milk supply chain,” John Finn said.

Finn highlights that retail price discounting is devaluing fresh milk and squeezing the economic value needed to pay fresh milk producers to sustain their year-round supplies for liquid consumption.

“We in IFA share this analysis and have criticised Aldi and other retailers who engage in unsustainable discounting with the sole aim to improve market share, at the expense of all others in the chain, especially farmers,” Finn added.

“Farmers can clearly see the cynicism of these recent members of Origin Green, who publicly espouse alleged values of sustainable sourcing and social responsibility.”

Origin Green Values

Finn also highlighted a producer survey carried out in the summer which shows that, on average, only 37% of specialist producers’ supplies are contracted for liquid milk. 72% have increased their creamery/ manufacturing milk supplies, with the majority planning to produce more creamery milk.

Finn said that “it is clear that as farmers opt to lift manufacturing supplies, the economic sustainability of their relatively dwindling winter and year-round contracted fresh milk supplies will come into question in farm management decisions.”

“Retailer behaviour, and their engagement with Unfair Trading Practices such as unsustainable discounting, must come under scrutiny and be stamped out, especially when they claim to espouse Origin Green values,” Finn added.

“The long-term sustainability of fresh milk supplies for Irish consumers, especially as Brexit may reduce the already falling import option, depends on this,” he concluded.