A decision by the UK’s Office of Fair Trading (OFT) to refer the supply of raw milk supply to the Monopolies & Mergers Commission (MMC) has been welcomed by all sides.
The OFT is concerned that farmer-owned co-operative Milk Marque, which supplies around 50% of milk to the UK dairy market, operates a price structure detrimental to competition. The announcement of the enquiry came just a week after Milk Marque announced it had failed in its attempt to raise raw milk prices at the start of the January selling round.
The inquiry will look at all aspects of milk supply, including the supply by farmers to Milk Marque and other co-operatives, and the supply by Milk Marque and other co-operatives to dairies. The recent purchase by Milk Marque of a cheesemaking plant will also be scrutinised.
The Dairy Industry Federation (DIF), which represents dairy companies processing 90% of UK raw milk supply, said the investigation was a victory for common sense.