Dairy Contracts Consultation

Published date03 September 2020
Subject MatterGovernment, Public Sector, Government Contracts, Procurement & PPP
Law FirmButcher & Barlow
AuthorButcher & Barlow

Evidence gathered by the Government has confirmed that unfair practices exist in the dairy industry. The Dairy Contracts Consultation which was opened by DEFRA on the 24 June and closes on the 15 September will explore whether regulations could be introduced to ensure farmers are treated fairly.

Cheshire has always been at the centre of the UK dairy farming industry and it is vitally important that all dairy farmers respond to this consultation.

The Consultation was opened in response to concerns raised that the primary milk producers (farmers) tend to occupy positions of relative market weakness in the food supply chain.

Those of us in the "older generation" will remember the Milk Marketing Board, which paid a fixed price per gallon dependent upon milk quality, and evened out the price both geographically and across the year.

On the abolition of the Milk Marketing Board farmers were free to enter into their own contracts with supermarkets, cheese producers, dairies and other end users. However it was soon demonstrated that the individual farmers had unequal bargaining powers which has the potential to expose them to both fluctuations in their price and in certain cases an unequitable price structure. This has led to competition for certain "contracts" and the buyers imposing very tough conditions on the farmers themselves.

A number of other nations have introduced regulations to stabilise markets and address the imbalance of bargaining positions. In the EU, Germany and France have introduced laws which require written milk...

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