FARMERS FOR Action will this week (w/e July 16) file a complaint with the Office of Fair Trading against three major UK dairy processors, Dairy Crest, Robert Wiseman Dairies and Arla, for effectively working as a cartel.
“We have decided to ask the OFT to investigate because it is the FFA‘s belief that there‘s a cartel at work,” FFA chairman David Handley told FARMERS WEEKLY on Tues (July 13).
“We have looked at the international market, and we have found that in other countries prices are on the increase.
“We are practically the only country with decreasing prices paid to dairy farmers at the moment,” Mr Handley said.
The FFA suspects that the three major processors are manipulating the market together.
“Dairy Crest was the first to cut the milk price. Then Wiseman followed suit about a month later and dropped its price. And now we are hearing that Arla may drop its price,” the FFA chairman said.
He added that he had confirmation from Tesco that they had not influenced any price reductions from the processors.
“They told me they‘re not putting any downwards pressure on whatsoever.”
On the basis of this situation, the FFA has decided to approach the OFT.
“The complaint will go in this week, and the OFT must now investigate what is going on among the dairy processors,” Mr Handley said.
The three companies denied the allegations.
Dairy Crest told FW that there was no truth in the claims from the FFA, and a spokeswoman for Arla said: “We have not been operating a cartel.
“With regard to raw milk price, this is subject to negotiation between Arla, its direct-supply farmers in the Arla Foods Milk Partnership and the supplying co-ops.”
Graham Jack, spokesman for Robert Wiseman Dairies, was similarly concise in his response to the allegations: “To suggest that the dairy processing sector is anything but fiercely competitive, beggars belief,” Mr Jack said.