You have to consider that whilst supermarkets can make a lot of profit off other products, other processors don't. Milk in the supermarket, makes very little profit. Supermarkets don't make much profit from basics anymore. Its a way of getting customers in the store to begin with. Processors who use milk as an ingredient make profits but have to do so from a smaller range of products and are again having that squeezed by supermarkets, so are trying to pass it on to the farmers. Its these products that supermarkets make the bigger profit on.
Ultimately, production costs have to be spread throughout the chain or it all collapses. You can't just import to make up the difference and expect to make the same level of profit. So the whole thing is a ridiculous set up.
Interesting read about how one local supermarket does 'fair trade' with farmers.
Its a more general article about how they trade but does include details on how much they charge for milk. (99p for 2pints verses 89p for other supermarkets at time of press in Nov).
I appreciate 10p for 2 pints is a substantial difference, but the costs end up being balanced a great deal by the fact that there aren't other hidden costs that would result if there was substantial numbers of British farmers pushed out the market by the price drive by supermarkets and processors that are putting them out of business (eg taxes, lost of jobs, cost of imports, lost of jobs in related industries, money being lost from in the uk that would otherwise pass to other industries, risk of being held to ransom by rising cost of fuel, cost of maintaining land that was previously used for agriculture, less of an argument to prevent building on land previously used for agriculture etc etc). It soon doesn't seem such a huge difference at all when you start adding up the costs of the alternative to paying fairer prices. The price on the label isn't the price you pay for food ultimately.
Thing is, if this supermarket can do this with the scales its doing it on, then why on earth can't the likes of Asda and Tescos do the same thing and be better at it?