Müller Milk & Ingredients has renewed its supply contract with Lidl in the UK, which includes a new fixed-price offer for farmers supplying the discounter.
Following the completion of its first three-year fixed-price contract, the new long term deal will see Müller continue to supply fresh milk to the majority of Lidl’s British stores. It is also designed to help local dairy farmers manage price volatility and gain long term financial certainty.
From 1 July, Müller Direct farmers will have the option to secure up to 50% of their milk supply at a 29ppl fixed price, for three years. The remainder of the volume they produce will attract the market-related Müller Direct milk price.
The move is part of a partnership between Lidl GB and Müller Milk & Ingredients, which will see the dairy company continue to support the retailer’s Grassroots Dairy Partnership. This provides a network for the next generation of dairy farmers on Lidl’s contract to engage directly with the discounter, as well as with their own peers, to overcome challenges facing the sector.
Over the next 12 months, the Grassroots Partnership will support dairy farmers in the programme to help reduce on-farm carbon emissions. It will also offer young farmers the opportunity to collaborate with those working in other sectors within Lidl’s supply chain as part of an information exchange effort to share best practice.
The majority of Müller Direct farmers are also now part of the Müller Advantage programme, which incentivises them to address a range of issues for consumers and customers, such as herd health and reductions in environmental impact.
Rob Hutchison, Chief Operating Officer at Müller Milk & Ingredients said: “We are delighted to extend our long term partnership with Lidl GB. Our fixed price option will help farmers by giving them stability and confidence in their future operations.”
Ryan McDonnell, Chief Commercial Officer at Lidl GB, added: “We’re pleased to announce this new offer and to be continuing our long-term partnership with Müller, which will create security of supply for our farmers and bring the best of British to our customers.
“Sustainability is at the heart of everything we do and, through this initiative, we are proud to support the next generation of farmers to tackle some of the biggest challenges in the industry today, while providing the stability needed for investment and future growth.”
NAM Implications:
- A pointer for other suppliers?
- Think growth…
- …but also Lockdown pressures + rising inflation…
- …causing a move back to the discounters.
- Despite Tesco’s appeal…
