Fairer dairy contract regulations come into force in July

Milk processors will be required to begin issuing farmers with new “fairer” dairy contracts from this July.

Legislation has been designed to create more price transparency for farmers, as well as providing cooling-off periods and minimum notice periods for contracts.

It will also change the rulings on exclusive contracts, which will prohibit processors from making farmers supply every single litre of milk a farm produces to one processor when on a fixed-volumes contract.

See also: Milk prices breach 40p/litre but higher costs hit producers

The Fair Dealing Obligations (Milk) Regulations 2024 were first laid in parliament on 21 February and are due to come into force from 9 July 2024, with a 12-month transition period.

Regulations are then due to be fully enforced on all new and existing contracts by 9 July 2025 and the secretary of state will oversee and enforce the code.

Brian Walters, dairy committee chairman at the Farmers’ Union of Wales, said: “Processors will now be required to review their contracts over the next twelve months in order to become compliant with these regulations, and I am hopeful that as a result of these changes there will be a fairer foundation for selling milk across Great Britain.”

The new legislation has evolved from the voluntary code of practice for dairy contracts, which was first introduced in 2012.

Mr Walters said: “The voluntary dairy code was established to stamp out unfair contractual arrangements between milk producers and purchasers which could, in turn, help stabilise the UK dairy industry.

“Despite many processors supporting the values of the voluntary dairy code, the lack of legislation meant some processors continued with unfair and underhanded contractual expectations, leaving dairy farmers extremely vulnerable to market changes.”