Tesco is one of the last retailers to introduce this kind of initiative but it's good that they have acknowledged the issues in the dairy industry - and the fact that they are addressing these issues is good for farmers.

Sainsbury's Chief Executive Justin King

At the NFU conference in February, Justin King clearly pledged Sainsbury's ongoing commitment to the dairy industry - and by April 2008 we will have paid a £10million premium directly to farmers.

We believe that the market is best served by initiatives which connect farmers directly to consumers - for example, with Farm Promise milk, launched in April 2006, we pay a fair premium and make a contractual commitment with farmers to support them in converting to organic milk production.

We source 25 million litres of milk a year on a local basis, which is primarily sold through our regional convenience stores with the local farmer identified on pack.

In the past two weeks our agricultural manager and milk buyer have travelled around the country meeting the farmers in our recently established Dairy Development Group to confirm premium payments and discuss the potential for added value products.

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