U.K. dairy farmers caught in a supermarket price war

Sunday, April 3, 2011

British dairy farmers say they are on the front line of a price war they didn't start with the Asda chain promising to sell its groceries 10 per cent cheaper  than rivals Tesco, Sainsbury's and Morrisons.

According to published reports in Britain, milk was often sold for less than water in supermarkets. National Farmers Union leaders say confidence among dairy producers is at an all-time low. They fear low prices will come at the expense of farmers, and are calling for the introduction of a retail watchdog. The idea of an ombudsman is opposed by the British Retail Consortium, which cites lack of evidence that suppliers are bearing the brunt of intense competition between retailers.

Before the price war began, British shoppers were facing food inflation of about four per cent. BF