On Friday, the UK co-operative, Milk Marque, which handles supplies of raw milk to the British dairy industry, presented a plan for splitting the company up into three large regional companies. If approved, the demerger will take effect from April 1, 2000.
The planned, regional companies, each of which will receive 1.7 billion litres of milk, will be able to supply milk to the dairy industry based on local agreements, which will replace the national agreements currently in force. The plan, which has been favourably received by the British Government, will now be put to Milk Marque's Annual General Meeting.
The move will present the three regional companies with a number of options. They may, for instance, continue along the existing pattern where they exclusively supply milk for processing. Providing the necessary funds are available, they may also choose to start own production. Yet another option is to establish closer ties to existing dairy companies.
Milk Marque's plan follows criticism from the British competition authorities which have accused the farmer-owned company of abusing its position in the market through the half-yearly selling round of raw milk to the dairy industry.