View from City Road: The future for milk is definitely off

Plenty of people have cause to be angry about the way the milk industry is being reformed - chief among them food manufacturers and dairy companies. The Milk Marketing Board, hardly a model of free- market efficiency, was allowed to write the rules for its own wind-up. The Government resolutely refused to consider setting up a regulator (or Ofmilk, as many would have delighted in calling it), appointing an arbitrator, or even allowing the Office of Fair Trading to consider the scheme before it comes into operation in November.

The result, unsurprisingly, is MMB Mark II, otherwise known as Milk Marque, which is expected to sign up 80 per cent of the farmers in England and Wales. That means yesterday's warning by Andrew Dare, its chief executive-elect, that milk prices will rise under the new regime should be taken seriously - he will be in a position to make it happen. Unigate, Northern Foods, Nestle and the other large milk users are eager to sign up with farmers directly. But, if Milk Marque achieves its target - and its constitution, coupled with the conservatism of farmers, makes that a probability - they will have no option but to buy the majority of their milk from one source - but without the safeguard of an arbitrator to ensure that they get a fair deal on prices. All very unsatisfactory.

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