ORGANIC DAIRY FARMERS RESPOND TO TESCO PRICE CUT

06 March 2002

Statement from Sally Bagenal, Chief Executive of OMSCo

Cutting the price of conventional milk has not increased sales and is driving British dairy farmers out of business. Organic milk costs more to produce because unlike conventional dairy farmers, organic dairy farmers do not boost production by using cheap GM feed supplements, synthetic chemical pesticides and have higher animal welfare standards. We believe the current price is a fair price for a quality healthy British product

We are saddened to hear of Tescos decision to cut the organic milk price.

We are concerned that Tescos unilateral decision to cut price can ultimately only be achieved by cutting the price paid to farmers. Organic farming methods inevitably cost more than conventional farming methods because there are no quick fix solutions  they dont use of artificial fertilisers or cheap GM feed and have very high animal welfare standards. The price reflects a fair price of production and British organic dairy farmers can not afford price cuts, which could push the costs below that of production and lead to job losses.

Further price reductions are not sustainable and wont help to develop the organic milk market any more than price cuts have helped the conventional market which is has been in steep decline for years.

OMSCo have taken a decision to sell the organic milk surplus into the conventional market in order to maintain the organic price because in depth consumer research has demonstrated that price is not a serious motivator of potential organic milk consumers. They are looking for quality, healthy products for themselves and their families, which represent for value for money rather than the cheapest cost.

OMSCo began a marketing programme in August 2001 to develop the organic dairy market by promoting benefits of organic dairy which is produced without GM feed, without antibiotics unless when ill and without grazing on pastures treated with pesticides.

OMSCo applauds far sighted supermarkets such as Sainsburys who committed to a five year price and volume agreement with British organic dairy farmers in 1999 to support the developing organic market.

Editors Notes:
· The Organic Milk Suppliers Cooperative (OMSCo) is a co-operative of British organic dairy farmers who produce around three quarters of British organic milk
· From 1995 OMSCo have operated a fair price system which reflects the cost of production and a reasonable return to the farmer. This has operated in both undersupply and oversupply
· OSMCo supplies organic milk to Express Dairies who supplied Tesco
· A spokesperson from OMSCo is available for comment.
For more information please call Nicole Ralph-Bowman or Katy Bedingfield on 0117 922 7799