Retailers are benefitting from dairy product promotional activity at the expense of farmers, according to the National Farmers Union (NFU) Cymru.
Maurice Jones, Milk Board Chairman for the organisation, said that farmers “are the biggest losers” in the grocery supply chain that brings dairy products to the shelves of UK shops.
His comments come after the recent publication of DairyCo’s annual dairy supply chain margins report, which shows that farmers continue to receive a price that sits below the true cost of production.
Over the 2009-10 milk year, the farm gate price fell compared to the previous 12 months, but retail gross margins grew during the same period.
Jones commented: “These latest figures are a complete vindication of the NFU’s Great Milk Robbery report.
“As ever, dairy farmers are the big losers and have yet to see their fair share of better market returns.
“During 2009-10 retailers were able to grow their margins at the expense of processors and farmers, who both suffered a fall in gross margins and despite there being no increase in prices to consumers.”
NFU Cymru’s warning comes after it joined the NFUs of Scotland, England and Northern Ireland in calling for retailers to assess their price-setting strategies to prove they back their own claims of supporting British beef farmers.
In a joint statement published in August, the groups said farmers would be unable to afford beef production costs this winter if meat is sold at its current level, while many in the industry are considering their futures as a result.