Milk Marque considers break-up
28 July 1999
Milk Marque considers break-up
By FW staff
MILK MARQUE officials are considering breaking up the farmer-owned cooperative in a last-ditch effort to secure better prices for dairy producers, it has emerged.
Board directors are discussing whether to split up Milk Marque to protect its processing interests in the wake of the Monopolies and Mergers Commission report.
The report, published three weeks ago, ruled that Milk Marque had unfairly abused its dominant market position to the detriment of dairy companies.
Trade secretary Stephen Byers said later that Milk Marque could not invest in any more processing capacity without prior agreement from the Office of Fair Trading.
The company will now reveal its plans within weeks to put an end to the “damaging uncertainty” that has hit dairy farmers since the release of the report.
There is little doubt, however, that safeguarding the co-ops intention to develop its processing arm will dictate events.
Farmers at Milk Marques AGM yesterday (Tuesday) passed a resolution allowing the co-op to issue preference shares to raise up to £200 million for investment in processing.
Splitting the co-op into two or more groups to overcome the restrictions on processing is an option being discussed, a MM spokesman told Farmers Weekly.
“We need to decide if we can do what we need to under the regulatory regime, or whether we would need to make some changes to our structure,” he said.
“But this uncertainty needs to come to an end – we will announce something within weeks, rather than months.”
Milk Marque chairman Poul Christensen has refused to make a statement any sooner, but said it was clear that the dairy industry must change.
“We will find a way forward for our members and we will do it soon,” he said.
“Unless we get this one right, there will effectively be no independent dairy farming sector in this country.”
Earlier today, Mr Christensen acknowledged that Milk Marque could reach a radical decision regarding its future.
“I am ruling nothing in and I am ruling nothing out,” he told Radio Fours Farming Today programme this morning.