23 February 1996

Low-fat levy fight won by direct milk sellers

By Shelley Wright

TWO direct milk sellers have defeated the Residuary Milk Marketing Board in the long-running dispute over low fat milk levies.

Hector Buckley and Selkley Vale both refused to accept the RMMBs offer last year of a 10% discount if they paid the levies owed to the board for low fat milk sold when the milk marketing scheme was still operating.

They opted instead for arbitration. The preliminary hearing has found in their favour. Mr Buckley was cleared of all liability, while Selkley Vale had its liability reduced only to the milk sold between March and November 1994.

The ruling found that the two had "legitimate expectation" after the MMB had repeatedly said it would not enforce levies on low fat milk. Even when the board changed its mind, direct sellers were entitled to a period of grace.

The MMB was able to demand the levies after a European ruling in March 1994 supported its view that low fat milk was covered by the milk marketing scheme, and was therefore liable to the same levies charged to direct sellers of whole milk. Responsibility for collecting the outstanding debts fell to the RMMB after Vesting Day in November 1994.

Other direct sellers have also opted to go to arbitration, although a spokesman refused to say how many cases were pending. The RMMB would not make any comment on the arbitrators ruling other than its advisors were studying the implications.

The majority of the 400 direct sellers involved in the low fat milk dispute accepted the RMMB discount offer and have already paid their bills. But, following last weeks arbitration, they may now demand refunds and a review of their cases.

The NFU, which advised direct sellers to accept the RMMB offer, said that the Buckley case did not set any precedent.

NFU officials will meet RMMB chairman, Sir Derek Andrews, shortly to find out what it plans to with the other eight direct sellers who have opted for arbitration.