The main farm organisations have warned Dunnes Stores not to attempt to fund a milk price war against other retailers at the expense of dairy farmers.
The warnings came as Dunnes cut the price of its own-label, two-litre container of milk to 99 cent, a move that has been followed by Tesco and Supervalu.
After an emergency meeting of the IFA National Liquid Milk Committee yesterday, the chairman, Mr Donal Kelleher, said the current retail price wars were threatening to drive Ireland's 2,500 liquid milk producers out of business. He called on retailers and dairies to "finance price wars out of their own profits, and not out of farmers' pockets.
"In the last eight years alone, one quarter of registered liquid milk producers have been forced out of business.
"We are today receiving the same price as in 1989, not factoring in inflation of 44 per cent in that period," he said.
Mr Pat O'Rourke, president of the Irish Creamery Milk Suppliers' Association, called on dairy farmers to unite to defeat the threat from such action by the retailers.
"The reaction of some co-ops to this development is to threaten to withdraw farmer contracts, which is a blatant breach of farmers' rights and the rules set out in the National Milk Agency Act. This Act states that extra costs for production of liquid milk must be taken into account," he said.