Marks & Spencer is likely to extend a fair trade-style arrangement
with UK dairy farmers to insulate them from extreme price fluctuations
while ensuring a more sustainable milk supply for the company.
The high street retailer set up the pilot agreement, which is similar
to ones struck by companies in the coffee and tea trades, in October
2005. It guarantees farmers a contract price for six months, subject to
variation in the cost of inputs such as fuel and feed. The scheme is up
for review next month, but has been so successful that it is expected
to be expanded.
‘The price of milk fluctuates wildly in the UK, so a stable price means
that farmers can go to their bank managers and say they have a fixed
income coming from M&S and request financing for the future of
their business,’ explained Mike Barry, head of CSR at Marks &
Spencer.
‘Ultimately, these measures give us a more sustainable supply chain,
while enabling farmers to focus on quality and innovation that will
serve as a point of difference for us on the high street.’
Marks & Spencer buys all its milk, estimated at 50 million litres a
year, from UK suppliers that are part of its Select Farms initiative.
To qualify, farms must comply with strict quality standards and agree
to regular audits of animal welfare, livestock housing, farm hygiene,
food safety and environmental impact.
Apart from Waitrose, Marks & Spencer is the only large UK food
retailer that has a direct relationship with its milk suppliers, which
consist of 50
farms in England, 13 in Scotland, 11 in Wales and two in Northern
Ireland.
