29 September 1995

Inquiry call into MMs selling

By Shelley Wright

THE Dairy Industry Federation still hopes that competition authorities will order a full inquiry into Milk Marques selling system.

Approaching the first anniversary of industry deregulation, DIF president, Neil Davidson, said there was still a lack of equilibrium in the selling system and dairy companies could not survive.

Speaking at the National Dairymens Association conference in Brighton, Mr Davidson added that it was only a fluke that many dairy companies had survived this year.

"It is sheer luck that the processing industry is not on its knees now," he said. At the last minute, after discussions with the competition authorities, Milk Marque offered to fix a green £ rate last year.

No one could have foreseen the following series of devaluations and it was this fluke that saved a number of companies, said Mr Davidson. The devaluations strengthened the prices that dairy companies could extract from the market, while the price of raw milk from Milk Marque remained fixed.

"Weve made detailed submissions to the Office of Fair Trading about the selling system. We believe that the OFT wanted to see at least two rounds before reaching any conclusions," he said.

Mr Davidson added that he still believed the DIF had a very strong case and that there should be a full Monopolies and Mergers Commission inquiry.

He insisted that the UK needed a strong dairy processing industry. "There was always a danger of farmers exploiting their position in the short term and crippling the industry in the long term," Mr Davidson said.

He also criticised farmers, and some dairy companies, for their "short sightedness" in effectively ending national generic promotion.

Shadow farm minister Dr Gavin Strang also supported a return to national generic advertising for milk. He said it was essential to maintain milks image as an essential part of a healthy diet. Funding should come from a redirection of CAP money. &#42