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MMC delay brings dairying uncertainty

- 17 September 1998
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By Robert Harris


DAIRY farmers and milk buyers face a winter of uncertainty after a three-month delay in the Monopolies and Mergers Commission report into the supply of raw milk in Great Britain.


The Government has agreed to a request by the MMC for an extension of the deadline until 26 January, 1999, mainly due to the large number of representations from all sides of the industry.


Although many suspected the original October deadline was too tight, the announcement has disappointed farmers and buyers alike.


“We probably wont know until the end of February or March whether the minister has accepted the MMC recommendations,” says Michael Lambent, NFU milk committee chairman. “We face a further six months of considerable uncertainty.”


That includes the likelihood of another difficult selling round next spring, he points out. “The present selling system is not working very well. Producers are not getting the prices they need, and it is difficult for dairy companies to buy in six-monthly tranches.”


The vexed question of Milk Marque processing its owned milk also needs a swift answer, says Mr Lambert. “Strategic planning is urgently needed. Net income has fallen from £360 to just £30 a cow in the past three years. How can we plan if we do not know the parameters?”


Jim Begg, of the Dairy Industry Federation, which represents buyers, suspects changes to Milk Marques selling system are to blame triggering additional discussion by both parties.


Both farmers and processors need to plan ahead, he added. “We are disappointed with the delay, but we would rather the MMC got it right.”


Paul Beswick, managing director of Milk Marque, which supplies 42% of UK milk, said: “This is a complex industry. We know the MMC had to assimilate an enormous weight of evidence, so it comes as no surprise to us that the inquiry will take more time than initially anticipated.”

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