20 January 1999
Dairy firms slam Milk Marque prices

DAIRY companies could pull out of bidding for milk supplies from Milk Marque after slamming proposals to increase prices as unjustifiable.

Milk Marques proposals include an increase of 0.7p per litre (ppl) to take the price of its cheapest “varying supply” contracts to 21.2ppl from April 1.

These contracts accounted for about two-thirds of milk sold by Milk Marque in the previous selling round last summer.

Milk Marque also plans to cut two other, more expensive, types of contract that offer customers greater security and predictability of supply.

It proposes cutting the price from 21.8ppl to 21.5pppl in its “ex-farm profile contracts” while cutting from 23.3ppl to 22.5ppl its “premier service contracts”.

The changes in total cut the difference in pricing between varying supply and ex-farm profile contracts from 1.3ppl to 0.3ppl.

Dairy company sources quoted by the Financial Times indicated resistance to the scale of the proposed rise.

The selling process is the last before the completion of a Monopolies and Mergers Commission investigation into the supply of raw milk in the UK.

It is due to be sent to the Department of Trade and Industry early next week.

  • Financial Times 20/01/99 page 11