20 February 1998
Milk Marque cuts prices

MILK MARQUE, the farmers co-operative which collects and markets raw milk, has been forced to slash prices as processors failed to bid for more than 90% of the milk available in its third round of selling.

The co-op will now be forced to go to a fourth round of selling in a bid to offload excess milk.

Paul Christensen, chairman of Milk Marque, said farmers were justifiably angry, wanting to know why shop prices had not dropped when farmers milk prices had already fallen by 20%. The lower on-farm milk prices are expected to improve the returns to processors.

There is no love lost between Milk Marque and processors, with both sides publicly criticising each others role in the industry and requesting Office of Fair Trading intervention.

Milk Marque plans to complain to the OFT about the selling system which forces it to cut prices – when its unable to sell more than 90% of the milk on offer – until the lowest price reaches a level equivalent to a European Union (EU) base price.

Milk Marque has opened a fourth round of bids with the base price set at the EU level of 19.01p a litre. This is a far cry from its first round, when it set prices at 20.4p per litre.

The price cut comes as the Monopolies and Mergers Commission continues with its investigation into the milk market.

  • Financial Times 20/02/98 page 25