Sainsbury’s has increased its annual investment in its dairy farmers by £6 million meaning its suppliers will be paid more for a litre of milk from next month.

From October 1, farmers supply milk to Sainsbury’s will receive an extra 1p/L on top of the independently calculated Cost of Production price of milk that the retailer has followed since 2012

For a farm producing roughly 2.7 million litres this would equate to an extra £27,000/year.


This price increase follows a year-long review by Sainsbury’s into how it pays farmers for milk.

Alongside the price increase, £1.7 million of the total £6 million investment is also being committed for sustainability bonuses. Farmers will be rewarded for helping Sainsbury’s to achieve its Plan for Better targets, specifically carbon reduction, through activities such as using sustainably sourced feed and using the correct amount of fertiliser, in the right way. 

The retailer hopes the increased investment will also give farmers the “confidence and desire” to invest in long-term infrastructure changes to comply with new legislation.

“The dairy farming industry is becoming increasingly challenging and we recognise the responsibility we have as a retailer to support farmers and the need for continuous investment in this sector,” Gavin Hodgson, director of agriculture, aquaculture and horticulture at Sainsbury’s, commented.

“We’re proud of our continued investment into the Sainsbury’s Dairy Development Group and are confident our £6 million annual investment will help farmers to plan for a long-term and sustainable future.

“In turn, we hope this will also provide surety of supply for our customers as we continue to champion British milk now and for the future.”