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Major dairy companies boycottMilk Marques latest selling round

20 July 1998
Major dairy companies boycott
Milk Marques latest selling round

MILK MARQUE will not be accepting any bids from the first round of its July sales after the major dairy companies refused to bid.

The boycott by the major companies was half expected, but has infuriated the MM directors, who plan to take the issue up with the Monopolies and Mergers Commission on Wednesday.

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Major dairy companies boycottMilk Marques latest selling round

20 July 1998
Major dairy companies boycott
Milk Marques latest selling round

By FWi staff

MILK MARQUE will not be accepting any bids from the first round of its July sales after the major dairy companies refused to bid.

The boycott by the major companies was half expected, with Milk Marque directors accusing processors of “signalling” to each other leading up to last weeks sale.

Nevertheless, the boycott has infuriated the MM directors, who plan to take the issue up with the Monopolies and Mergers Commission on Wednesday.

“In an obvious exercise of market power, the major dairy companies decided not to bid at all this round,” Paul Beswick, Milk Marque managing director, said.

Prior to last weeks sale, Milk Marque attempted to push the average raw milk price up 2p a litre to 21.5ppl and scrapped the controversial 90% selling rule. It claimed these two moves were necessary following the disastrous January selling round, which saw milk prices fall to 19.5ppl – below cost of production on most farms.

Mr Beswick said he was disappointed by the outcome after spending the past two-and-a-half months working with the Dairy Industry Federation (DIF) on reshaping the July selling system.

“We went out with the July 1998 selling round incorporating many of the changes which had been discussed, including the dropping of the 90% rule. We set indicative prices which we thought were fair and reasonable having regard to the marketplace and my discussions with the DIF,” he said.

“For some reason the DIF began to distance itself from these discussions as the time for opening the July selling round drew closer and, to my surprise, the DIF and the major companies responded in a very hostile way to the selling package,” he added.

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