dairy cows© Monkey Business/Rex

The Farmers Union of Wales has called for the Competition and Markets Authority (CMA) to review the workings of the UK dairy market.

The FUW said many of the major retailers had attempted to foster public loyalty by publicising the prices paid to farmers on retailer aligned contracts, which were at the higher end of the league table.

However, in Wales, such contracts accounted for just 4% of the milk produced and this was very low compared with the 25% of milk production that was on retailer aligned contracts in the UK.

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With this in mind, the FUW has been a strong proponent of expanding the Groceries Code Adjudicator’s powers to cover all dairy producers and not just those on retailer aligned contracts. But it is also keen that the Competition and Markets Authority gets involved, too.

“The CMA is the UK’s lead competition and consumer authority and has the power to scrutinise the functioning of markets for the benefit of businesses and consumers,” said FUW senior policy officer Dr Hazel Wright.

“Much of the work of the CMA has focused on issues pertaining to the payday lending market and the union believes that the groceries retail market would benefit from similar scrutiny.”

Dr Wright said price wars remained one of the most prominent tactics in UK retailer armouries, but it was a tactic which inevitably led to important and staple products, such as those involving dairy, being used in a bid to enhance market shares.

“It is imperative that Welsh dairy producers are not expected to enlist in retailer price battles. Is it not, and never has been, the job of the producer to fund supermarket price cuts or to enhance a retailer’s market share. Sacrificing producers to a retailer price war can only function to further break an already fractured supply chain,” added Dr Wright.