The UK unit of Wal-Mart, Asda, has renegotiated its contract with Dairy Crest for the supply of cheese.
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The retailer has agreed to source its cheese from Dairy Crest’s Aspatria dairy for the next two-years and committed to only reviewing forward prices every six-months. The agreement, Asda said, is the first of its kind in the UK and it guarantees that the price for milk will not fluctuate as much, allowing farmers to financially plan ahead
Asda added that it allowed the company to “end the cheddar lottery”, as all of its cheese comes from the same site. This can’t be said for other retailers who source from a number of countries, including Australia, New Zealand, South Africa, Poland, Latvia and Ireland.
“This is the first time anyone has committed to a deal like this,” said Asda’s head of ethical and sustainable sourcing, Dr Chris Brown. “It’s fantastic news for the farmers that supply Aspatria and is a further illustration of our commitment to British farmers and builds on other industry-leading initiatives we are involved with, such as the Asda Milk Partnership.”
Tom Hind, chief dairy advisor at the National Farmers Union, said:“The British dairy industry needs longer term commitments to give dairy farmers confidence and this initiative is a welcome step towards achieving that objective. However, there is still much more to do and we would encourage all retailers to build relationships like this and to move away from the practice of short term tenders, which are very often for imported cheese.”
