Reaction to Tesco's move on milk price

Date: 5-April-2007

It is good news for the market that the UK's biggest retailer has moved so strongly on farmgate price. There are now some major challenges for the rest of the market to respond to Tesco's move.

There are also challenges for both First Milk and Wiseman Dairies as to how we set ourselves up to provide the dedicated pools that Tesco have indicated they will require. However, First Milk is well-placed to benefit as we supply Wiseman Dairies with 40% of their total milk requirements. The critical balancing service we provide for customers like Wiseman Dairies, plays an integral role in facilitating supply chain efficiencies.

I can assure you that we are speaking to all the parties involved to ensure we are part of this move. I can also assure you that we are working hard to achieve better returns from the wider market, particularly the cheese sector, which as you know is a significant part of the UK dairy market.

My hope is that Tesco's move is the start of a wider market move to re-establish a fair return for UK dairy farmers.

Peter Humphreys
Chief Executive

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