Arla returns a full 1ppl increase to producers

Arla Foods UK plc has confirmed to its dedicated milk supply group, Arla Foods Milk Partnership (AFMP), comprising 1,600 individual members, that it has increased its standard litre price by 1ppl from 1 April 2007, bringing the price for a one million-litre producer to 19.4ppl.

In a letter to all AFMP producers, Peter Walker, Arla's Director of Milk Buying, said that the increase was made possible because the company was passing back to producers all monies recovered through recent negotiations with its customers to reflect extra on farm costs.

Some increases have been achieved during March and these monies will be included as part of the forward price from 1 April 2007.

In his letter to producers, Peter Walker said: "Over the past few weeks Arla has been progressing, with all of its customers, the claim put forward by its farmers for farm cost inflation. I am pleased to report that good progress has been made with the majority of customers now having agreed to price increases to reflect these extra on farm costs.

"The Tesco announcement is further positive news. Arla is now working very closely with the Tesco team to put in place the supply chain arrangements to meet Tesco's criteria so that their designated producers are in receipt of the Tesco price of around 22ppl at the earliest practical date. Our target for completion of the project is three to four months.

"Once the Tesco initiative is successfully implemented, and because of the well established relationship with Asda, around 60 per cent of AFMP members will receive a significant premium over Arla's basic price. We will continue to look for opportunities to extend these benefits to more Partnership members as and when opportunities arise.

"We are pleased that the profile of our customer base has allowed us to report good progress in improving returns for Partnership members."

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.