The dairy industry has welcomed a move by the European Commission to tackle falling European butter prices, but warned it may be too little too late.

The EC will allow producers to put their surplus butter into private storage two months earlier than usual, on 1 January.

The scheme, which is designed to regulate the volume of butter on the market, would allow supply to be brought into line with demand more quickly and reduce the downward pressure on prices.

Those who put their butter into storage would also receive their subsidy earlier than usual.

European wholesale butter prices, currently at a 10-year low, have fallen 20% since July this year, according to DairyCo figures.

Dairy industry body Dairy UK described the move as positive, but said that it was too early to predict its effectiveness. "It's a welcome initiative by the EC, but we'll just have to see what impact it has and whether there's a requirement for further moves," said Peter Duncan, policy director at Dairy UK.

Butter manufacturers were sceptical as to whether the early introduction of the scheme would lead to a price increase.

" Whether it will do anything to stop the decline in butter prices is doubtful," said Huw Thomas, head of market information at DairyCo. "It's more likely to slow the decline."

A number of factors had caused the fall in butter prices over the past year, said Duncan. High butter prices in 2007 caused some manufacturers to move away from using butterfat, while increased global milk production led to higher volumes.