Liquid milk market is 'broken and no longer sustainable'

Speaking at the NFU Conference, Birmingham, he said the Arla liquid business and Muller were both massively invested but losing money, and the processors were not getting the value for the core product from the retailers.

“We have ended up with a pretty dysfunctional liquid market and if something does not change these guys will not keep supplying that market,” he warned.

“We have seen Sainsbury’s catch a cold and have had to step back and re-assess their relationship with the processor and the price they are paying.

“Because the primary producers have been in such a weak position, processors have been able to fill their factories by taking business off each other, but I think now even they know they have gone too far and left themselves no margin.”

He said that for producers to get a better deal then ‘buyer’s discretion’ would have to come out of contracts and that he was hoping to get the whole subject before the EFRA select committee for them to investigate.