Cuts and increase: Iceland makes milk price changes

But the frozen food retailer has slashed the price of one pint from 50p to 25p, the price of two pints from 75p to 50p and the price of six-pint containers from £1.85 to £1.50.  

Iceland denied playing any role in negotiating prices with farmers, after the dairy crisis sparked a wave of protests by the farming community this summer. ​

‘Simpler and clearer’​ 

“​Iceland has moved to a simpler and clearer pricing structure for milk of 25p per pint, regardless of the size of container,”​ the retailer said in a statement.

“There is no change in the milk price that Iceland pays to its suppliers. Iceland buys all its milk from British processors, with whom we agree a price inclusive of processing and delivery.”​ 

Meanwhile, the global dairy industry was set for continued growth of at least 2%, Rabobank senior analyst Kevin Bellamy told the European Dairy Association Annual Congress in Edinburgh last week. ​

‘Demand for dairy will expand’​​

“Demand for dairy will expand, particularly driven by emerging markets, and this will result in more target destinations for companies," ​he said. 

“There will be plenty of opportunities for dairy built primarily on population growth and per capita consumption.”​ 

A Russian import ban, reduced demand from China and overproduction in Europe have contributed to rock-bottom milk prices at present. 

“There is clearly too much milk on the world market and leading dairy countries, such as New Zealand, have been facing extremely challenging conditions,” ​Bellamy said. 

“There are rising stocks in the US which is likely to reach a tipping point, resulting in milk prices falling by the end of 2015.​”

Meanwhile, Dairy Crest’s £80M sale of its dairies operations to Müller has secured approval​ from the Competition and Markets Authority.