17 April 1997

NFUwants 90% milk rule axed

FALLING producer prices have led the NFU to call for the 90% rule to be suspended for Milk Marques next selling round in July.

The rule was introduced by Milk Marque in August 1996 in a bid to stop the Office of Fair Trading referring the co-op to the Monopolies and Mergers Commission, the NFU said. It means that Milk Marque must open a further round of bidding, at lower prices, if it fails to sell more than 90% of its available milk.

But, with an MMC inquiry into the raw milk selling system now under way, suspending the 90% rule could be an option to help ease the pressure on milk prices.

NFU president Ben Gill said the situation facing the milk sector was severe with producer prices plummeting by 25% over the past 18 months.

Waiting until October for the MMC report would be too late. "Milk producers are already gasping for breath," said Mr Gill.

Paul Beswick, Milk Marques newly appointed managing director said the co-op acknowledged the concerns of the 90% rule and was in no doubt that members were suffering severe problems.

"Farmers do not think that the 90% rule is an adequate measure of demand," he said. "Our customers have misgivings about the selling system and there is now a clear case for dialogue with interested parties." &#42