The once-mighty Milk Marketing Board successor has ordered advisor Baker Tilly to find it a business to buy. The criteria are that the venture must be food and agriculture-related and have a turnover of up to £100m.
It will not, however, invest in milk. This is to ensure it does not tread on the toes of the dairy businesses its 10,000 farmer members now belong to.
The development is the result of a deficit that Milk Marque, which was stripped of its powers by the government on competition grounds five years ago, carries in a £270m pension
fund. If the organisation were to wind up, as previously envisaged, its £17m worth of cash assets - which belong to its farmer members - would be claimed by the fund.
If, however, it changed its
status from a co-operative to a plc and invested the cash in a business, then its members would receive a return on the money through dividends from the new company.
Because of its co-op status, Milk Marque members must vote for the conversion. A 50% response is required, with 75% voting yes. This is a challenge: the danger is not that farmers will vote no, but that apathy will result in a failure to generate the required response rate. It is envisaged Milk Marque will aim to stage a vote in late July.
Milk Marque chairman Roger Evans said: “If farmers vote for the proposal we will go ahead, convert and buy a business. If they don’t vote, we will liquidate and the money will go to the pension fund. It’s as simple as that.”
If an acquisition is made, it is unlikely the Milk Marque name will live on. “We’ll change the name almost certainly,” said Evans.