17 September 1999
Milk Marque splits into three?
by FWi staff
MILK Marque, the countrys biggest supplier of raw milk, is expected to confirm that it is to voluntarily break itself up into three separate regional companies.
The farmer-owned co-operative is expected to announce on Friday that it will split into three companies covering the south, the Midlands and the north.
A voluntary break-up would make it easier for Milk Marque to expand its interests in the lucrative milk processing industry rather than supplying the product raw.
But a split would come be a bitter blow for dairy farmers who are almost certain to see further cuts in the price they are paid for raw milk.
Poul Christensen, Milk Marques chairman, indicated last year that such a move would be disastrous for producers.
“It is perverse in the extreme for farmers organisations to get smaller when the rest of the dairy industry is rationalising and getting bigger,” he told producers.
The Financial Times predicted a few weeks ago that Milk Marque could split to overcome rules restricting its involvement in the milk processing sector.
Similar reports appeared in the Dairy Industry Newsletter two days later and were broadcast on Thursday by BBC Radios Farming Today programme.
The prediction was repeated on Friday morning by The Times, The Independent, and again by the FT.
A Milk Marque spokeswoman described all the reports as speculation.
But she confirmed: “A voluntary split is one of the options which we have been considering as everybody knows.”
A Competition Commission report earlier this year said Milk Marque was abusing its dominant market position to boost the price of raw milk paid to farmers.
But Stephen Byers, the trade secretary, rejected the commissions calls for the enforced break-up of the co-operative.
Instead, he imposed restrictions limiting Milk Marques plans to expand into the processing sector.