15 October 1998
Milk Marque could face break-up recommendation

By FWi staff

A RADICAL shake-up of the UKs milk industry could be recommended when the Monopolies and Mergers Commission (MMC) is completed in January.

Measures being considered by MMC officials investigating the milk industry are thought to include the break-up of Milk Marque, according to todays Financial Times.

The MMC inquiry began after complaints about the way Milk Marque sells milk.

Dairy processing companies claim the farmer-owned cooperative had abused its dominant position to force up milk prices.

The processors are especially critical now that Milk Marque has begun to acquire and build its own processing capacity.

They argue that Milk Marque will soon be able to manipulate milk prices by bidding in its own auctions.

In a letter to interested parties, MMC deputy chairman Denise Kingsmill has asked for comment on five “hypothetical” changes to the selling system.

These include reforming Milk Marques bidding system or putting it into the hands of a “neutral” third party.

Another option is the division of Milk Marque into three or more regional bodies.

Ms Kingsmill also asks for comments on whether Milk Marque should be forced to sell its processing capacity.