UK-wide consultation into dairy sector to tackle supply chain issues launched

Thursday June 25th, 2020

The UK Government working with the devolved administrations have launched a consultation seeking to end any unfair practices across the UK’s dairy sector.dairy farming

Evidence gathered during the Groceries Code Adjudicator Call for Evidence in 2016 highlighted how unfair practices have persisted in the dairy industry. This consultation will explore whether regulations could be introduced to ensure farmers are treated fairly.

This evidence suggests unfairness in the supply chain has sometimes been caused by milk buyers having the power to set and modify the milk price in a contract, often with little notification. This leads to uncertainty and pricing that can be unfair to dairy farming businesses.

To supplement wider efforts to support dairy farmers during the coronavirus pandemic and into the future, the UK Government with the devolved administrations in Scotland, Wales and Northern Ireland have worked together to launch a consultation seeking views from dairy farmers and processors across the whole country on whether future regulation could be used to strengthen fairness and transparency.

Proposals include an option to introduce a mandatory pricing mechanism within all contracts between dairy farmers and processors.

This would ensure the price paid for milk produced by the farmer is formally agreed within the contract, and that contract negotiations take place in a clear and transparent way.

This announcement is the latest action from UK governments to support dairy farmers, following the Dairy Response Fund in England, which opened for applications on Thursday 18 June and a similar support scheme in Wales last month, which enables eligible English and Welsh dairy farmers to access up to £10,000 each to help them overcome the impact of the coronavirus outbreak.

This builds on recent action to temporarily relax some elements of UK competition law to allow suppliers, retailers and logistics providers in the dairy industry to work more closely together on some of the challenges they are facing.

Farming Minister Victoria Prentis said:

“It is absolutely vital that our dairy farmers are paid fairly for their high quality produce and I am committed to cracking down on any unfair practices within the UK dairy industry.

I welcome all views to this consultation to determine how best we can guarantee fairness across the supply chain. This will help the industry continue its vital role in feeding the nation and ensure our dairy farmers can continue to be competitive in the future.”

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