Impact of Pennsylvania State Minimum Milk Pricing on Farmers and Distributors
Learn about the potential consequences of removing Pennsylvania's state minimum milk pricing on local farmers and distributors. Discover the challenges faced by the industry and the growth of milk alternatives. Explore suggestions for maintaining a competitive market while supporting local producers.
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Presentation Transcript
Milk distribution, PA State minimums and an overview of the category Presented by: Anthony Gigliotti, EVP of Sales and Marketing for Boyer s Food Markets
FARMERS The State of Pennsylvania currently holds the most milk producing farms in the Tri-Sate region. Pennsylvania holds the number 6 position in milk production for the entire United States. This is due to the protection of the PMMB state minimum pricing that is currently in place. How will the removal of the state minimum affect our Farmers?
DISTRIBUTOR Local distributors throughout the State of Pennsylvania will no longer be able to compete with the larger, national, milk companies. It may become the reason for the closure of many local milk companies throughout our state.
Why we cant allow minimum milk pricing to go away This would lead the industry s larger retailers dropping their retails in the milk category to lost leaders. (i.e. Ice cream) We would see $0.99 gallon price points eventually. We are already seeing this in other states like Maryland. This causes pricing wars amongst the retailers. The retailers, in fact, would go back to the distributors for better pricing compression in order to help alleviate the margin compression and dollar loss through our registers. This would spiral right back to the farmers for better pricing everyday. Competition would go away as the largest milk suppliers in the country and state would be able to give the largest retailers in the country and state the best everyday pricing in order to push retails down. This would in turn force out the local retailers and local milk companies.
Milk Alternative Category We are seeing substantial growth in the milk alternative category. (i.e. almond milk, soy milk, etc.) We need to remove the verbiage MILK from these labels and call them what they really are, Plant based drinks to help increase milk sales again. I'm all for new category growth, but not at the expense of another locally produced item.
Going forward I would like to see sales GROW in the category versus being down 2-3% a year, every year. Provide an allowance of up to 8 times a year (2 per quarter) where the milk companies are able to reduce milk .50 HGL to 1.00 GAL for each chain. Retailers can only reduce the retail, penny for penny. Remove the approval process that vendors and retailers currently have to undertake to do a buy x and get milk free type of deal. The vendors would continue to fund it, but this would elevate the red tape. Allow a maximum number of promotions for this per year.
Thank you for your time today. If you should have any questions or comments at a later time you can reach out to me at : antgig@boyersfood.com
