Milk Marque set for voluntary break-up

MILK MARQUE, the UK dairy cooperative, is expected to announce a voluntary break-up today, despite the Government's view that such a move would be "radical".

Milk Marque is expected to offer to break up into three regions - Scotland and north England, central England and Wales, and southern England - in response to a Monopolies and Mergers Commission (MMC) report in July that banned Milk Marque from expanding into cheese and yoghurt processing. A source close to the company described the proposals as "a reluctant facing of reality".

The MMC report called for a major shake-up of the milk supply industry to prevent Milk Marque from exploiting its monopoly position but stopped short of recommending a break-up.

Stephen Byers, Minister of Trade and Industry, said the restructuring of Milk Marque would be "a drastic step, which would affect a large proportion of dairy farmers in England and Wales". He pointed out that the process could take two years.

The Department of Trade and Industry is expected to release a statement offering broad support to the proposals. But the DTI is likely to require further consultation with Milk Marque on two issues. It will be keen to ensure that the successor bodies will be fully independent and it is likely to further seek clarification on Milk Marque's processing plans. Other producers will also be invited to express their views on the proposed restructuring and a decision on whether it can go ahead will be taken in the next few months.

Milk Marque replaced the statutory Milk Marketing Board in the early 1990s. It has a 49 per cent share of the UK milk supply market.