Dairy Crest relaxes notice rules

One of Britain's largest milk suppliers is relaxing rules that tie crisis-hit farmers into 12 month contracts.

Dairy Crest, which supplies around 15% of British milk production, said farmers will be able to move their milk supply with three months' notice if they are unhappy with price changes, instead of the 12 months currently.

The move will give farmers more flexibility and comes as part of measures to help offset the impact of damaging milk price cuts on the industry.

But the change will not come into effect until after Dairy Crest's 1.65p per litre price cut planned for August 1.

Dairy Crest - behind well-known brands Cathedral City, Clover and Country Life - is one of a number of milk producers that have slashed the price they pay farmers for milk after seeing the value of cream plummet this year.

The National Farmers Union (NFU) said it welcomed the decision by Dairy Crest to reduce the notice period for milk suppliers, but it warned farmers wanted to see a reversal of the price cut and would demonstrate again if the reduction was not scrapped.

More than 2,500 farmers gathered in London last week to protest about the cuts.

Robert Newbury, chief dairy adviser at the NFU, said: "I'm glad to see Dairy Crest is moving to improve the way it deals with farmers. But the clear call from farmers is that the price cuts should be reversed."

Dairy Crest's latest price cut follows a 2p per litre reduction in May and will see farmers paid just under 25p a litre for milk - less than the 30p a litre it costs to produce milk, according to the NFU.

The NFU said there are fears many milk farmers will be forced out of business. Mr Newbury said: "It's taking them to an impossible price to maintain and many aren't sure if they'll now make it through the winter."