Farmers supplying Muller will see a 1ppl cut in milk prices from February 15.
The cut represents the first price announcement by Muller Milk and Ingredients following the acquisition of Dairy Crest’s dairies operations.
It means Muller Milk Group (formerly Muller Wiseman Milk Group) farmers will receive a cheque of 21.35ppl and Muller Direct Milk (formerly Dairy Crest Direct) contracts will be worth 20.69ppl.
It is the first time Muller farmers’ prices have been cut in five months, with company bosses pointing to the further weakening in dairy markets caused by high farm supplies and poor dairy commodity demand.
Lyndsay Chapman, agriculture director of Muller Milk & Ingredients said: “Our strategy is to add value to the milk we buy from the 2,000 dairy farmers who supply us and we remain committed to offering competitive milk prices and contracts.
"We are very aware of the pressures on farm resulting from the depressed marketplace and have tried to provide stability by maintaining the milk price since September, despite very difficult and declining market conditions."
But Ms Chapman admitted the company could not fully protect suppliers from the realities of the market.
"We have therefore had to reduce the milk prices we pay to our farmers by 1ppl, providing the required 30 day notice period," she said.
The cut in prices follows Muller Milk & Ingredients’s managing director Andrew McInnes’s address to this year’s Semex dairy conference in Glasgow.
Mr McInnes outlined the brand’s ambitions to reach £9 billion turnover by 2020 and claimed more acquisitions would be required to reach this target.