Proper Welsh Milk Company pays farmers more to save industry
31 October 2012 Last updated at 08:56 GMT
A dairy in Carmarthenshire is paying its farmers an extra 3p a litre in an effort to keep production in Wales.
Tesco are among the supermarkets who sell the milk alongside their own brand products.
They say they don't intend to pass the extra cost onto the consumer.
Richard Arnold, director of the Proper Welsh Milk Company in Whitland, told Oliver Hides on BBC Radio Wales it makes sense to bottle milk close to farms.