Press release

Arla leads milk price through 20p barrier

Arla Foods UK plc has announced the second consecutive monthly rise in the milk price paid to members of its dedicated milk supply group, Arla Foods Milk Partnership (AFMP). From 1 July 2007 the AFMP standard litre price will increase by 0.3p per litre to 20.1ppl.

Arla Foods Group Director of Milk Procurement, Peter Walker, said that the increase was a direct response to the improvements in dairy commodity returns. He also revealed that Arla Foods has suspended the balancing charge on excess litres from 1 June - an arrangement he hopes will stay in place until the end of 2007.

"This is good news for our dairy farmers. We are giving them the green light to produce as much milk as they can for the next few months and assuring them that they will be well paid for doing it," said Mr Walker.

"Arla is paying the highest milk price, being the first UK milk buyer to break through the 20ppl barrier. We have always said that we will react quickly to changes in market returns and that is just what we have done," said Mr Walker.

"Our standard litre milk price is at the top end of industry returns. In addition, as a result of our relationship with Asda and Tesco, from July around 60 per cent of our members will receive a significant further premium over the Arla base price."

Jonathan Ovens, AFMP Chairman welcomed the increase as a "very positive response by Arla Foods UK plc to improvements in dairy commodity prices".

"We have always impressed on Arla Foods that our members would want to see commodity price improvement reflected in the farm-gate return with minimum delay and I am delighted they have done that."

Arla Foods UK plc is home to some of the UK’s leading dairy brands including Cravendale, Lurpak and Anchor. Processing approximately two billion litres of milk a year Arla continues to be one of the UK’s leading dairy companies and a supplier of fresh liquid milk and cream to the top seven retailers.

Over 2,500 daily deliveries are made directly to stores nationwide and Arla brands can be found across the dairy category. As well as the leader of the butter, spreads and margarine sector, and a major supplier of other added value products including flavoured milk and cheese, Arla continues to build working relationships with Arla Foods Milk Partnership, a unique group of dairy farmers, which supplies around 90 per cent of Arla's total milk requirements.

Behind this leading business is a team of circa 2,800 people across the UK located at our dairies, distribution centres and head office.

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