Cheesemakers, who have been squeezed until the “pips squeak” during the cost-of-living crisis, are being forced to sell their goods abroad to make more cash.
Favourites such as Cheddar, Red Leicester and Wensleydale may disappear off the shelves in the coming months as a result.
John Allen, director of Kite Consulting, said cheesemakers have found themselves in a “perfect storm” of challenges.
Some have lost retail contracts or face weak demand after inflationary price increases, high stocks after strong milk volumes and prices, plus the higher cost of borrowing.
Mr Allen said: “Many cheesemakers are in a weak negotiating position, and up against retailers battling with their own competitive pressures and who have re-tendered for significant quantities of business.”
Many are now on the brink financially, he added, so it is “no surprise that some would generally rather sell abroad than sell in the UK”. He urged supermarkets to address the low returns to cheesemakers by showing “a greater understanding of how the supply chain works”.
Retailers may be tempted “to have little mercy, given the ample supply situation and that the cost-of-living crisis also hurts them”, he said. “But it is not in their longer-term interest to squeeze UK cheesemakers until the pips squeak.”
Without support, supermarkets would find themselves with fewer cheesemakers, fewer farmers supplying them, less milk and less cheese for the UK market.
Mr Allen added: “UK retailers need a strong, viable UK-based cheese value chain who want to supply them.”
Oli Smith, 36, of The Bristol Cheesemonger, said: “The dairy industry has had massive cost increases chiefly due to Brexit and the Ukraine war. At some point producers will have to pass on more of the costs to remain viable.”
Andrew Opie, of the British Retail Consortium, said: “Retailers understand how tough it is for businesses, source the majority of food from the UK and know they need to pay a sustainable price to farmers and manufacturers. But they face extra costs and aim to limit price rises.”
