Fascinating tale of how supermarkets use a product as a loss leader, but that apparently causes problemsÂ up the supply chain:
Farmers are threatening protests after Iceland cut the price of a four-pint milk carton from ÂŁ1 to 89p.
The budget store is using milk as a loss leader â selling below cost price to lure in customers â with the result it is even undercutting discount chains Aldi and Lidl.
However, the news has angered dairy farmers who complain they have been hit with a succession of punishing price cuts which are forcing them out of business.
FFA chairman David Handley said: âThis move by Iceland is a disgrace. It will feed through to lower prices paid to farmers.
âThe supermarkets are devaluing milk. We are almost getting to the point it is so cheap that people will buy it because it doesnât matter if they throw it away.
Rob Harrison, chairman of the National Farmersâ Union dairy board, said: âWe will be speaking to Iceland. This continual devaluation of milk is a real concern to our industry.
âIt is rather rash and stupid to do this when lots of dairy farmers are suffering with low prices. Read more »