Now dairy farmers take on coffee shops in milk price fight
Giant coffee shop chains are the latest target of dairy farmers angry at the price they are paid for milk.
Retailers such as Starbucks have long been targeted by anti-globalisation campaigners, but now the West’s dairy farmers are after a fairer share of the famously high margins the coffee industry generates.
Only a fraction of the cost of a typical drink such as a latte goes to dairy farmers.
Campaigners claim the big-name coffee houses use as much milk as major supermarkets and estimate the industry is siphoning off millions of pounds each year which should be paid to struggling producers.
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The National Farmers’ Union (NFU), which along with Farmers for Action (FFA) has forced a number of supermarkets and dairies to raise milk prices this month, say consumers are unaware of the true cost of their daily coffee.
A medium (grande) latte in Starbucks costs £2.50 and contains about half a pint of milk.
This costs farmers about 9p to produce, but they receive only 7.5p, the NFU says.
And with coffee chains using an estimated 615 million pints of milk a year farmers could be losing £18 million annually, just supplying the burgeoning industry.
Robert Newbery, chief dairy adviser to the NFU, said: “Coffee chains claim to take corporate responsibility very seriously with fair trade policies for coffee growers, yet they fail to make policy provisions for their dairy farmers.”
The NFU held talks with coffee chains last week and has not ruled out calling for protests outside shops if they fail to raise their prices.
Starbucks buys its milk from Dairy Crest, which pays farmers about 27p per litre.
This is below the price paid by Costa, its rival, which gets supplies from Freshways, whose prices range from 29p to 29.5p.
Caffè Nero and Pret A Manger also pay less than the cost of production, according to the NFU.
A spokesman for Starbucks said the price it paid per litre had risen by 2p in the past year and welcomed the Dairy Crest decision to postpone further price cuts in order to have negotiations with farmers.
However, Somerset dairy farmer and FFA spokesman James Badman warned that if negotiations broke down, they would again be forced to “use the only language they seem to understand”.
Mr Badman said operators across the food and drink service sector, including large coffee shop chains, were guilty of a “buy it cheap” mentality.