Sainsburys under attack from its farmer suppliers

Sainsburys farmers in the North of England and Scotland are furious with the retailer to the point several are claiming they are immediately seeking a new milk buyer and want to exit the Sainsburys Dairy Development Group because “its heads Sainsburys win and tails its dairy farmers lose.”  On a practical note finding a new milk buyer in Scotland looks challenging!

Sainsburys are half way through a series of regional farmer meetings, which haven’t gone according to plan and parachuting any spin doctors and head honchos in hasn’t placated some of their loyal switched on farmers.

The problem is if cost savings of 2p are achieved Sainsburys intend to pocket the entire 2ppl with no sharing or benefit of the rewards to their farmers.  This means efficient farmers are victims of their own success which is unfair and unacceptable.

In addition, the Sainsburys farm units have, on average, expanded but the fixed amount added in for family labour at 1.44 head at the national agricultural workers pay is being constantly diluted in the ppl COP as on farm production increases.  One simple solution is to change the model to a ppl labour cost but that doesn’t suit Sainsburys because it will cost them money.

The way the Sainsburys COP model deals with bought in feed is also under attack, particularly from its 20 or so Scottish farmers.  The cost of feed per tonne is that charged by the Sainsburys buying groups price for all feed, however, Scottish farmers can’t buy their feed at that price and are not part of the group buying.

Either the Scottish farmers feed price should be factored in to the model or alternatively consideration to a Scottish regional Sainsburys COP will have to be considered.  One Sainsburys farmer claims his actual COP is 4ppl above the model.

The final straw has been the recognition that for years the Sainsburys COP model has costed calf milk powder and Megalac in at the feed wheat price, which Sainsburys have held their hands up and agreed to correct.

The difference in costings is now recognised by Sainsburys as amounting to 0.9ppl, which farmers have lost.

As further proof that Sainsburys don’t really care about their farmers COP they have decided that of the 0.9ppl deficit farmers will be given 0.6ppl but Sainsburys will retain 0.3ppl and, at the moment, there are no moves by Sainsburys to back-date any of the missing money to its farmers to reflect the shoddy calculations in previous years.

The Sainsburys farmers have had to scrutinise the costings themselves and the end result is, after 11 years of working with British farmers, Sainsburys appear to be on a suicide mission to wreck all the trust they have built up.

Some Sainsburys farmers no longer trust the COP model, no longer trust Sainsburys and generally feel very disappointed and let down.  All they are asking for is fair treatment from the retail giant.

Back in 2015, Sainsburys took out large adverts in The Times, Telegraph, Mail, Express and Star where the strapline was:

 “At Sainsburys we support our British fresh milk farmers, does your supermarket?”

followed by:

“We believe the farmers who produce our milk should also make a living.”

These were fantastic supportive statements, which some of its Scottish and North of England farmers now believe to be false in 2018.

Do Sainsburys still “want to work with (its dairy) farmers to offer long term relationships with stable profitable prices?”

The jury is out on this question but unless Sainsburys attitude towards its 250 or so remaining SDDG farmers changes they look set to lose even more dissatisfied producers.  The situation is best described as “fragile”.