TESCO ORGANIC MILK PRICE CUT FAILS - British organic dairy farmers are proved right on price issues

16 September 2002

Tescos controversial move to reduce on-the-shelf organic milk prices in order to boost sales has failed, according to new data from TNS Superpanel. The latest figures show sales of Tescos own label organic milk 8% lower than this time last year  despite the fact that over the same period all other major supermarkets have seen sales increase.

Britains largest organic dairy farming cooperative, OMSCo  which criticised the decision at the time  said it is not surprised that the move has proved ineffective, since price is not a key driver for purchase. In depth research with potential organic consumers shows their need to understand where the added value from organic milk lies; this in turn will stimulate demand.

David Whiting, OMSCo Marketing Director, said: Research on potential organic milk consumers, together with the actual experience of supermarkets, shows time and again that price is not a motivator in this category. The supermarkets will never grow the market by cutting the price  this will only happen by explaining in simple terms to consumers why they should buy the product.

 It is such a shame that some organic farmers and their co-operative allowed this price cut to occur. It didnt boost sales and we believe the farm-gate price was cut as result. Once again, it was farmers who lost out.

OMSCo is continuing to support its consumer marketing activities, with evidence from TNS Superpanel of organic milk sales continuing to rise at around 15% on a rolling annual basis. Further new activity is expected in the Autumn.

ENDS

For further information, please contact Jim Crawford/Chris Davies on 0117 922 7799.