22 April 1998
Milk Marque dismisses DIF
processing capacity claims
By Catherine Hughes
MILK MARQUE has dismissed Dairy Industry Federation claims that there is already more than enough dairy processing capacity in the UK.
The federation has accused MM of misleading farmers and consumers about its motives for buying processing capacity.
It states that, between 1987 and 1992, the trade agreed with the Milk Marketing Board a programme of three capacity rationalisation schemes, which cost farmers £134 million. Dairy companies were required to sign covenants preventing them from reopening processing plants or investing in new capacity over the next five years. But even after the third scheme, there was still spare manufacturing capactiy at deregulation in 1994, it claims.
But Paul Beswick, managing director of MM, said the claim that there is plenty of capacity would astonish farmers: “If this is the case, why is it that, in every selling round since 1996, we have been consistently underbid?
“Even when our milk price was lower than anywhere else in Europe, the lowest-price contract was at the Intervention milk price equivalent.”
Mr Beswick admits that there may well have been spare manufacturing capacity in 1994 but, since then, the liquid market had declined by 7% and major manufacturing plants at Whitland, Appleby and St Erth had closed. “This,” he said, “is the reason Milk Marque Developments was set up as a separate company to explore processing opportunities.”