COMMENT:The real reason the milkman's time is up
"The milk round may be a great British institution. But it will only be preserved if consumers choose to pay higher prices to keep it."
Friday 24 March 1995
Unfortunately, Mr Haskins was also talking a certain amount of rubbish himself, in blaming job losses and the death of the milkman and the corner store on Milk Marque, the farmers' co-operative that last year replaced the old Milk Marketing Board.
It is true that Milk Marque is an unregulated monopoly with 70 per cent of the market, operating in a business hamstrung by the Common Agricultural Policy, whose milk quotas restrict UK farmers to supplying no more than 85 per cent of the market. This produces an institutionalised shortage that distorts the market in fresh milk and milk products, and cries out for utility-style price regulation to protect consumers.
The Government rejected the idea of a regulator during consultations on the new organisation, claiming milk prices would fall when Milk Marque started selling last November. But it was wrong. Instead, Milk Marque's aggressive pricing policy has led to an increase of up to 20 per cent in the cost of milk supplies for making butter, cheese and yoghurt and of at least 5 per cent for fresh milk. The dairy industry has quite rightly complained to the Office of Fair Trading and the Brussels competition authorities.
There is no doubt that Milk Marque has added to the cost pressures on food manufacturers. That in turn exacerbates rationalisation and job losses. But it is also quite clear that these trends were well under way, and were bound to continue whatever happened to the price of milk.
Northern admirably clung to the idea of preserving milk rounds and corner shop deliveries at high levels longer than most of its competitors. To some extent the latest restructuring is a catch-up, and is all the more dramatic because it has been delayed.
The milk round and the corner store have in reality been declining because of tough price competition from supermarkets. In both fresh milk and milk products, the huge buying power of Sainsbury's, Safeway and the other large chains is the real driving force behind the changes in the industry and the squeeze on manufacturers. Dropping the milk price a notch or two would do nothing to alleviate this pressure.
The milk round may be a great British institution. But it will only be preserved if consumers choose to pay higher prices to keep it. Alternatively milkmen must learn some new tricks. Your average milkman is hardly the world's best salesman, and his product range is expensive and distinctly limited. What he does have, however, is a direct relationship with the consumer, something which many businesses would pay to exploit.
- 1 Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
- 2 Margaret Thatcher 'expressed fears of Asian rising' at Anglo-Irish summit in 1984
- 3 Sussex couple die in suspected Christmas Day 'suicide pact'
- 4 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 5 The Unluckiest People of the Year 2014 (and one very unlucky giraffe)
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Immigrants make UK racist, says Ukip councillor Trevor Shonk
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...