Dairy farmers’ leaders have warned processors and retailers not to use the Office of Fair Trading’s investigation into suspected price fixing of liquid milk to justify inaction on farmgate prices.
Earlier this month Robert Wiseman Dairies and Dairy Crest admitted they were being quizzed by the OFT in relation to initiatives that have resulted in the retail price of milk rising, with the extra passed down the supply chain to help prop up farmers and processors.
Insiders believe Arla Foods UK and major retailers are also likely to be in the frame.
Farmers For Action chairman David Handley said he feared processors and retailers would now refuse to embark on any new price-based supply chain initiatives for fear of incurring heavy fines should they be found guilty of price fixing by any subsequent Competition Commission inquiry. But, claimed Handley, this fear was without basis. “I’ve not got a problem with the OFT. They’re there to look after consumers’ interests, and while consumers say they would pay more for milk to help farmers, they don’t need to. There is plenty of money for all in the milk supply chain without putting up the retail price of milk again.”
Handley warned that farmers were poised to strike for five days in the first week of December, unless other parts of the supply chain - and the government - took steps to discuss the crisis with producers. He admitted he would like to see the dairy sector benefit from an event similar to last month’s high profile beef summit, following which Defra announced an £8m aid package for the beef sector.
“We want to see some positive vocal movement on farmgate prices,” Handley added.
Richard Clarke