Industry attacked over milk prices
National Farmers' Union (NFU) president Peter Kendall has slammed supermarkets for squeezing milk prices, which it claims forces three dairy farmers out of business every day.

At the NFU's annual conference, Kendall said: 'Retailers are going to have to get off their backsides and act pretty sharpish [to prevent the sector's decline]. Wherever you go, people [dairy farmers] are planning their exit.'

The UK has lost 50 per cent of its dairy farmers since 1992 and milk production during August last year was the lowest in 12 years.

UK dairy farmers have been exposed to increased competition from imports under EU reforms. But many farmers argue that the low price they are paid for milk partly reflects the market power of Britain's big four - Tesco, Sainsbury's, Asda and Morrisons - and want a larger piece of the retail price.

A Competition Commission inquiry is investigating the power of the large supermarkets, examining supply chains, planning and land banks.

Kendall also queried whether the grocers' commitment to responsible retailing is little more than a PR stunt and said that the prices many farmers are paid are simply not sustainable.

Sainsbury's chief executive Justin King was present at the conference. 'We recognise and understand the challenges of the dairy sector. It is in the interests of our customers to ensure a strong, vibrant and profitable dairy industry for the long term,' he said.

'All of Sainsbury's own-brand milk - conventional as well as organic - comes from British farmers and we want that to continue.'

The Irish Farmers' Association (IFA) is also accusing large supermarket chains of forcing Irish vegetable growers out of business. IFA president Padraig Walshe said that unless retailers pay more to growers, the Eu57 million (£38.2 million) industry could soon become extinct.