J Sainsbury, the supermarket chain, today announced a shake-up of its milk supply arrangements in a move that should benefit hundreds of dairy farmers.
Robert Wiseman and Dairy Crest, which both take milk from First Milk, the farmers’ co-operative, have been awarded long-term contracts to supply the supermarket, which sells £228 million of milk a year.
Arla Foods, which recently beat Wiseman and Dairy Crest to a new supply contract with Asda, will no longer have an arrangement with Sainsbury.
John Duncan, the First Milk chief executive, said that farmers would benefit from the stability offered by the long-term contracts: “This is the best news for British dairying for quite some time.
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“We have over 4,000 supplying farms and to receive clarity on volumes for a longer period of time from Sainsbury’s is great news.”
Under the deal, Wiseman will increase its share of supplies to Sainsbury from 20 per cent to 50 per cent.
Most of the extra milk will come from its site in Droitwich and should replace much of the £70 million a year in revenues lost through the Asda contract.