Milk Marque changes could backfire

03 June 1998

Milk Marque changes could backfire

MOVES by Milk Marque to change the industrys complex selling system by June could backfire, according to buyers.

The co-operative has been pressing both its customers and the Office of Fair Trading to change the industrys complex selling system.

If milk processors dont purchase 90% of the co-operatives milk in its first selling round additional selling rounds are set up. This years first selling round was repeated an unprecedented four times because of a lack of interest from buyers.

However, dairy buyers have pointed out that the 90% rule is not as one-sided as some farmers claim. They argue that it counterbalances itself: they have an obligation to meet the price difference between offers made in two successive rounds, in cases where the dairy trade raises the volume requested at the lower price by more than 10%.

According to some buyers one provision could not be dropped without the other. The shedding of both these safeguards could result in just 50% of Milk Marques milk being purchased.

Buyers say the co-operative has to decide whether or not it wants the industry to trade milk without the benefit of safeguards or protection.

This could leave it with the problem of finding a market for a significant volume of milk without the benefit of a formal selling process. It could be forced to rely even more heavily on spot trading and contact processing to protect its members.

• The Scotsman 03/06/98 page 28