The price of cheese
Cheese is currently being retailed at an average figure of £10,000 a tonne, which may seem a lot of money, because it is.
But what is happening back at the farm gate? Well, milk for cheese is currently priced at 25p a litre, which is £2,500 a tonne for the basic raw material. On top of that you could reasonably add another £1,500 a tonne as the price of transport and processing, giving a total wholesale cost of £4,000.
Subtract that from £10,000 and it gives you the size of the margins I believe retailers are taking for cheese – which surely, in anyone's book, is scandalous.
I accept that supermarkets, like all businesses, have to make profits to satisfy their shareholders. But far too many have strayed from making modest, acceptable profits to pocketing margins that are nothing short of a scandal.
A level of 25 per cent, I suggest, would be not unreasonable and would still allow plenty of room for the price of milk-for-cheese to be raised to 40p a litre, at which point farmers would start to see some level of sensible return on their investment and we might find it easier to re-stock the sector with new entrants.
Anyone examining the actual costs of dairying rather than accepting the fanciful figures cooked up by those consultants employed by supermarkets to ensure their dedicated suppliers get a "fair return" can easily see how a case can be made out for the 40p.
Equally, there is just as good a case to be made out for paying 80p a litre for milk destined for the liquid market.
But what are the chances of either being attained? While the Government continues to turn a blind eye to supermarket sharp practice, to blunt the teeth of its new grocery trade ombudsman, and to hamstring and disadvantage would-be complainants – and while lavish political donations continue to pour from the coffers of the multiple retailers – they must remain so remote as to be out of sight, even with the most expensive pair of binoculars.
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