Milk crisis – coffee shops and dairy farmers remain friends

Despite what has been reported in the general press, dairy farmers and the coffee-house trade are not currently at war with each other. The relationship between them has reportedly been shaken during the current milk-price crisis, but some farmers have now gone out of their way to say that they appreciate the support that parts of the café trade have given them.

There has been some inflammatory language reported by the serious press, including reports that both Farmers For Action and the NFU have criticised the coffee trade for its general attitude towards buying milk. However, the chairman of FFA, the pressure group behind most of the recent action against the big milk processors, has told the Caffe Culture News Portal: “Coffee houses can help us a lot, and in turn we will promote them hard, because we’re all in this together.”

The milk industry in general has appeared to be extremely critical of the coffee trade, in news reports published at the end of July. Even the Sunday Times referred to those businesses not willing to pay a fair price for milk as ‘a shadowy group of coffee chains, caterers and local shops’. The Western Daily Press said: ‘giant coffee shop chains are the latest target of dairy farmers angry at the price they are paid for milk’.

In the Telegraph, a spokesman for the FFA was reported as saying that foodservice operators, including large coffee shop chains, were guilty of a ‘buy-it-cheap’ mentality, and that if negotiations broke down, farmers would be forced to ‘use the only language they seem to understand’.

Speaking to the Café Culture news Portal, the FFA has now complimented two of the main coffee chains for the clarity of the information that has been given back to farmers, and has said that the blame for the situation rests on the middleman, the giant milk processors and suppliers to the foodservice trades.

The current situation is that farmers complain they are being paid less for their milk than it costs to produce it – the general figure given is that it costs a farmer around 30p a litre to send milk to a processing company, who in recent times have been paying their farmers 27p a litre. As a result, dairy farmers are reportedly going broke at an unprecedented rate – there are only 14,000 in the UK this year, compared to 35,000 in the mid 1990s.

When the big milk processors said that they proposed to reduce that price even further from the beginning of August, down to perhaps 25p, dairy groups began a campaign of enhanced protests. As a result, at the end of July, several of the big processors said that they would not after all implement the reduction.

The Robert Wiseman company told the Caffe Culture Portal: “As you know, Britain is a nation of fresh milk lovers. Increasingly, the public buys semi-skimmed milk. So fresh milk processors like Wiseman produce millions of litres of cream each year as a by-product. Cream is a commodity and its value is determined by global supply and demand. Farmers have long had their milk price determined by the commodity value of their milk.

“The core issue is that this market has collapsed because of oversupply and weak consumer demand. So each litre of milk we buy from farmers is worth 5p less than it was worth a year ago.”

Arla has said: “Following discussions with customers and the elected representatives of Arla Foods Milk Partnership, it has increased its Cravendale premium and secured additional money totalling two pence per litre. For members who are not aligned to a retailer, this means their standard litre price has been maintained at 27 pence. We have agreed a transparent reconciliation method with our customers and our supplying farmers to demonstrate that all of the money recovered from the marketplace has been paid out in full.”

It has been suggested by the processors that the blame lies not with them, but with their customers – typically, big supermarkets, and suppliers to foodservice, who are making increasing pressures on price. This appears to be the group described in the press reference as the ‘shadowy group of coffee chains, caterers and local shops’ not willing to pay a fair price for milk.

The general press has also reported that the NFU has held talks with coffee chains, and one report says that according to the NFU, Starbucks, Costa, Caffe Nero and Pret a Manger all pay below the 30p figure. When invited to answer this and speak about whether they deserved to be included in the ‘shadowy group’, every major café chain either told its own trade media ‘no comment’, or did not respond at all.

One of the only café operators to speak on the subject was Adrian Jones of Street Coffee, the south London chain. He told us: “We’re organic, so we pay a premium – we pay 65p per litre.”

In response to this, the chairman of Farmers for Action, David Handley, told the Portal:

“To those who do pay a fair price, the question I put is this – please go back to your supplier and ask what amount of what you pay gets back to the farmer. That’s where the problem lies – the processors and distributors have charged the coffee trade astronomical prices, but we find that only a small percentage of this reaches the producer.

“So we have to go through this industry from top to bottom to make sure the product is purchased morally and ethically, because someone making vast profits gives great cause for concern.

“Two of the major coffee houses who pay a fair price, and who have nothing to fear from us, have shared a lot of very useful information with us. Other coffee houses can also help us a lot by sharing their prices with us, and in turn we will promote them hard, because we’re all in this together. No milk, no coffee house – so we can work together.”

It has also recently been reported that the National Farmers’ Union has held talks with coffee chains, and ‘has not ruled out calling for protests outside shops if they fail to raise their prices’. The NFU’s chief dairy advisor is reported to have said: “coffee chains claim to take corporate responsibility very seriously with Fairtrade policies for coffee growers, yet they fail to make policy provisions for their dairy farmers.”

A spokesman for the NFU has now said to the Portal that the NFU is certainly currently formulating a ‘plan of action’, and that coffee houses will be included in that.

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The Caffe Culture News Portal is the main online news source for the coffee and café trades. It can be read at http://www.caffeculture.com
Boughton’s Coffee House is the main news medium for the coffee and coffee-house trades, and the magazine can be read online at http://www.coffee-house.org.uk

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