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Morrison to Pay Dairy Producers More for Milk Amid Protests

July 21 (Bloomberg) -- William Morrison Supermarkets Plc, the smallest of the four main U.K. grocers, said it will raise the price it pays dairy producers for milk after payments that failed to meet production costs sparked protests by farmers.

Morrison, based in Bradford, England, follows the lead of smaller competitor the Co-operative Group, which said yesterday that it would increase payments for milk to dairy farmers. The supermarket chain recognizes “the exceptional pressure on farmers currently,” Morrison’s Commercial Director Richard Hodgson said in a statement on the company’s website today.

Farmers staged road protests after several processors announced cuts in payments. Processors and retailers have cited sluggish consumer demand for the cuts. The government is planning to meet representatives of major supermarket chains in the next few days, the British Broadcasting Corp. reported, without saying how it got the information.

Morrison said it will increase the premium it pays dairy suppliers on milk by 2 pence a liter to 3 pence and introduce a support payment of 3 pence a liter because of the extreme wet weather that is affecting farmers in the U.K.

The Co-op said it will raise the premium it pays to 2.57 pence a liter immediately and to 4.27 pence per liter on Aug. 1.

Wal-Mart Stores Inc.’s Asda supermarket chain said July 17 that it would increase prices by 2 pence per liter, offsetting a reduction by its processor supplier, Arla Foods Amba.

To contact the reporter on this story: Agnes Lovasz in London at alovasz@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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