Marque sets out plans for split-up

20 October 1999

Marque sets out plans for split-up

By FWi staff

MILK Marque members will vote on the whether to split the business into three independent co-operatives at a special general meeting on Thursday, 4 November.

Board members are hopeful of securing a two-thirds yes vote at the meeting in Malvern, Worcestershire, to allow them to proceed with major restructuring of the company.

Change was inevitable after a scathing report by the Monopolies and Mergers Commission (MMC) said Milk Marque was operating a monopoly.

The split of Milk Marque, which is responsible for nearly half of raw all milk sales in Britain, is designed to free farmers from the restrictions imposed by the report.

It will allow the three new co-operatives to process their own milk into value-added products, which are more profitable than raw milk.

Under the new proposals, members milk contracts, haulage and staff contracts will be re-assigned and members will be invited to join their nearest co-op.

Milk Marque will provide start-up loans and will contract to sell their members milk from 1 April, 2000.

Services such as milk testing, computing, office accommodation and milk payment systems will be provided by Milk Marque on a paid-for basis.

In a letter to members, Milk Marque chairman Poul Christensen told farmers that restructuring was “the right way forward for your business.”

The new businesses would be “large enough to protect your interests in the market place and free to grow and develop commercially without undue regulatory constraint.”

In July, the MMC recommended that Milk Marque should be broken up for abusing its position and keeping prices artificially high.

Stephen Byers, trade and industry secretary, rejected this at the time as being too drastic. Instead, he demanded Milk Marque reform its sales procedure.

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