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Dairy UK Welcomes EFRA Report

01 August 2011

UK - Effective competition law must remain in place, said Dairy UK, commenting on the EFRA Committee report last week.

Dairy UK Director General Jim Begg said: “The most important conclusion of the committee is that, in the implementation of the EU Dairy Package, effective competition law must remain in place where producer organisations are concerned.

"We believe that this is necessary to stimulate investment and encourage growth in the British dairy industry. In its conclusion the Select Committee is supporting the views of the European Parliament, the UK Government and Dairy UK.”

Mr Begg went on: “On contracts, we welcome the fact that the report recognises the dangers of excessively prescriptive regulation. We believe that everyone must be aware of unintended consequences of future regulation which would make contract specifications compulsory or that link contract duration to changes in milk prices.

"Processors pay premiums to obtain security of supply. Linking contract duration to price changes could deprive processors of security of supply, which could drive premiums from the industry and increase price instability to farmers. Ultimately, the solution lies with the industry, not in regulation.

“We further support the Committee’s promotion of investment and innovation in added value dairy products. Getting greater value from milk is the most effective way of increasing farm gate milk prices. We are also fully behind the Committee in its desire to see greater income spread down throughout the dairy supply chain.

“We also support the request for a clear Defra position on large scale farms as part of a portfolio of production systems which will continue to enable competitiveness in future.”

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