Under the present scheme, pregnant women and jobseekers with young children receive coupons entitling them to seven free pints of milk a week, purchased from retailers or milkmen, who claim money back from the government.
New DOH proposals would replace the coupons with vouchers enabling low income families to buy a selection of groceries to a certain cash value Â a system one senior industry source described as "fraught with practical problems". He added: "I think there is going to be a lot of opposition. The current scheme is not perfect, but it's simple and it's workable."
Practical issues such as whether change could be given and certain fruits would fall under the scheme and not others, could also cause major problems for checkout staff, said sources close to the discussions.
Given this kind of voucher would more likely be spent at a supermarket than with the milkman or a local store, doorstep businesses and smaller shops would feel the most pain, said Dairy Industry Association director general Jim Begg. Milk processors would also stand to lose a sizeable chunk of business to other sectors, unless the overall Â£142m budget was raised. "This proposal will hit a large number of small businesses involved in retail milk distribution and may even threaten their financial viability," said Begg. "I believe it will be challenged widely by a number of sectors on nutritional and economic grounds."