Iceland - 4 pints of milk for 89p

[TheRanger]

This kind of race to the bottom by the supermarkets is going to be the end of Dairying, as we know it, in this country.

 

[neilo]

This kind of race to the bottom by the supermarkets is going to be the end of Dairying, as we know it, in this country.

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Only if they are paying their suppliers less to finance it. If they are doing it as a loss leader, funded from the extra sales from getting more people through the door, then why is it an issue?

(Tin hat on again)

 

[grumpy]

Only if they are paying their suppliers less to finance it. If they are doing it as a loss leader, funded from the extra sales from getting more people through the door, then why is it an issue?

(Tin hat on again)

they are

 

[TheRanger]

Only if they are paying their suppliers less to finance it. If they are doing it as a loss leader, funded from the extra sales from getting more people through the door, then why is it an issue?

(Tin hat on again)

Of course they're doing it as a loss leader, but long term it drives down the price consumers expect to pay for 4 pints of milk. They're all at it.

 

[Blod]

I'm afraid I agree with Neilo on this. If you sell a brick you don't dictate where it goes. The issue is the price paid for the raw product.

 

[Darren]

If a fuel supplier did the same. Or a buy one get one free with a ltr of red, would it upset people?

 

[grumpy]

http://www.bbc.co.uk/news/uk-29502499

 

[topground]

I would suggest that FFA picket Iceland Supermarkets with a large mockup of a 4 litre bottle of Iceland milk showing the amount the Supermarket takes for having the milk on their shelves for a day and cash in the till. The amount taken by the processor for having the milk through their system for a day and the amount paid to the Dairy farmer for his product. That way the public get to know who is having the best of the deal. The public don't understand what is going on when there are £160K Fendts and Discoveries parked outside of processing plants they have never heard of.

 

[neilo]

I would suggest that FFA picket Iceland Supermarkets with a large mockup of a 4 litre bottle of Iceland milk showing the amount the Supermarket takes for having the milk on their shelves for a day and cash in the till. The amount taken by the processor for having the milk through their system for a day and the amount paid to the Dairy farmer for his product. That way the public get to know who is having the best of the deal. The public don't understand what is going on when there are £160K Fendts and Discoveries parked outside of processing plants they have never heard of.

And IF the supermarket is indeed using milk as a loss leader, and IF it shows they are actually losing money on every litre sold, whilst the producers and processors take the largest chunk, what then? I can't believe the supermarkets are making any margin on milk sold at those prices, even if the farmer only gets 25ppl and the processor gets a thin margin.

 

[Big Al]

I would suggest that FFA picket Iceland Supermarkets with a large mockup of a 4 litre bottle of Iceland milk showing the amount the Supermarket takes for having the milk on their shelves for a day and cash in the till. The amount taken by the processor for having the milk through their system for a day and the amount paid to the Dairy farmer for his product. That way the public get to know who is having the best of the deal. The public don't understand what is going on when there are £160K Fendts and Discoveries parked outside of processing plants they have never heard of.

I am not entirely convinced that the public are that concerned with processor/retailer profit margins. Probably not that bothered about farmers margins either.
There is currently a situation where supply exceeds demand, would you prefers supermarkets put the price up so that demand falls even further away from equilibrium. Price cuts might even stimulate a bit more demand to help mop up all those extra litres.

 

[grumpy]

And IF the supermarket is indeed using milk as a loss leader, and IF it shows they are actually losing money on every litre sold, whilst the producers and processors take the largest chunk, what then? I can't believe the supermarkets are making any margin on milk sold at those prices, even if the farmer only gets 25ppl and the processor gets a thin margin.

why no give up sheep and go in to dairying?

 

[bobk]

You can't help those that can't help themselves , ffs chuck it down the drain

 

[neilo]

why no give up sheep and go in to dairying?

Been doing that all my life up until 2012. I couldn't see a way to justify the capital investment of starting up a new herd then, just to tie myself to a job 365 days of the year on a small herd/no employees, and certainly can't now.

The reason for the current milk price drop is not the evil supermarkets, it's the collapse in world markets for commodity products, whose high value has made milk prices so good for the last 2 years and encouraged a steady, and ongoing, increase in global production.

 

[TheRanger]

I am not entirely convinced that the public are that concerned with processor/retailer profit margins. Probably not that bothered about farmers margins either.
There is currently a situation where supply exceeds demand, would you prefers supermarkets put the price up so that demand falls even further away from equilibrium. Price cuts might even stimulate a bit more demand to help mop up all those extra litres.

Is your solution to let free market capitalism take its course and put all of the less efficient (generally small scale family farmers) in this country out of business? and be left with fewer large scale producers who can ride out the highs and lows of the world market price?

Is there something we in this country can do to avoid that scenario, or is it a foregone conclusion?

 

[grumpy]

Been doing that all my life up until 2012. I couldn't see a way to justify the capital investment of starting up a new herd then, just to tie myself to a job 365 days of the year on a small herd/no employees, and certainly can't now.

The reason for the current milk price drop is not the evil supermarkets, it's the collapse in world markets for commodity products, whose high value has made milk prices so good for the last 2 years and encouraged a steady, and ongoing, increase in global production.

so you gave up but now preach from the side lines

 

[bobk]

4 pints = 2.273 litres @ 25p / litre = 56.825p to producer.
32.175p between processor and retailer.
If Iceland increase sales due to this price drop they might be the heroes that save the Dairy industry because of course, they won't seek to force the price to the producer down to protect their profits will they?

Don't forget the cream that's been sold elsewhere

 

[roscoe erf]

its a bit too far for me never liked the sea crossing anyway

 

[Big Al]

4 pints = 2.273 litres @ 25p / litre = 56.825p to producer.
32.175p between processor and retailer.
If Iceland increase sales due to this price drop they might be the heroes that save the Dairy industry because of course, they won't seek to force the price to the producer down to protect their profits will they?

Are the processors not using the excuse of global commodity prices to lower the milk prices in the UK at the moment. If that's their excuse then they will struggle to force it down below the global price on the whim of national retailers. Doesn't mean they won't try it though I suppose.

 

[Baling Hay]

Been doing that all my life up until 2012. I couldn't see a way to justify the capital investment of starting up a new herd then, just to tie myself to a job 365 days of the year on a small herd/no employees, and certainly can't now.

The reason for the current milk price drop is not the evil supermarkets, it's the collapse in world markets for commodity products, whose high value has made milk prices so good for the last 2 years and encouraged a steady, and ongoing, increase in global production.

You have no cattle at all now?

 

[RobFZS]

Are the processors not using the excuse of global commodity prices to lower the milk prices in the UK at the moment. If that's their excuse then they will struggle to force it down below the global price on the whim of national retailers. Doesn't mean they won't try it though I suppose.

whats the global price atm?