Arla announces 0.3ppl non-aligned farm premium

Arla Foods will pay a 0.3ppl non-aligned farm premium to all members of Arla Foods Milk Partnership (AFMP) who are not aligned to a retail customer backdated from 1 June 2008.

The 0.3ppl non-aligned farm premium follows Morrisons commitment to increase the price it pays processors for milk by 1ppl and its intention to establish closer links with British dairy farmers as part of its regional milk initiative.

The 1ppl, passed back by the retailer, has been equally shared across Partnership members who are not already aligned to one of Arla Foods retail customers.

Due to the natural variance in the volume of milk required by Morrisons on a monthly basis, Arla Foods has also committed to return any minor surplus money that may be available over and above the 0.3ppl non-aligned farm premium to the AFMP members involved on a quarterly basis.

Hanne Sondergaard, deputy chief executive of Arla Foods UK, commented: "We are pleased that Morrisons are demonstrating their support for British dairy farmers in what is a challenging time for the dairy industry. The non-aligned farm premium is great news and helps secure a more sustainable future for all farmers involved."

Commenting on the announcement, AFMP chairman, Jonathan Ovens, adds: "The 0.3ppl increase is another very welcome step towards AFMP's long term commitment to secure supplements from Arla Foods customers in addition to Arla Foods standard litre price. A group of AFMP producers has been established to work with Morrisons to build closer links across the dairy supply chain."

Following the 0.5ppl milk price increase from 1 June 2008, the 0.3ppl non-aligned farm premium takes Arla Foods milk price, paid to AFMP members who are not aligned to a retail customer, to 26.3ppl.

Arla Foods UK plc is home to some of the UK’s leading dairy brands including Cravendale, Lurpak and Anchor. Processing approximately two billion litres of milk a year Arla continues to be one of the UK’s leading dairy companies and a supplier of fresh liquid milk and cream to the top seven retailers.

Over 2,500 daily deliveries are made directly to stores nationwide and Arla brands can be found across the dairy category. As well as the leader of the butter, spreads and margarine sector, and a major supplier of other added value products including flavoured milk and cheese, Arla continues to build working relationships with Arla Foods Milk Partnership, a unique group of dairy farmers, which supplies around 90 per cent of Arla's total milk requirements.

Behind this leading business is a team of circa 2,800 people across the UK located at our dairies, distribution centres and head office.