MPs want supermarket watchdog's powers increased to protect all milk suppliers

20 January 2015

MPs have called on the UK government to extend supermarket watchdog powers to give dairy farmers more protection against falls in milk prices.

Members of the Environment, Food and Rural Affairs Committee want the government to extend the powers of the Groceries Code Adjudicator (GCA) to cover all milk producers.

At present the adjudicator, Christine Tacon, can only investigate complaints involving direct suppliers to the big 10 supermarkets and retailers. The bulk of UK milk production is small-scale so most dairy farmers are not given protection by the watchdog.

A report from the committee said all dairy farmers and other small-scale producers should be protected from large retailers by the GCA. 

Dairy farmers have been hit by a 50 per cent drop in milk prices over the past six months, caused by a drop in worldwide demand and a ban on exports imposed by Russia in retaliation against sanctions over the conflict in Ukraine. Farmers have been leaving the industry, causing the total number of UK dairy farmers to drop below 10,000.

Chairman of the committee and Conservative MP Anne McIntosh also criticised the government for not activating the GCA’s power to fine bullying retailers.

“We were shocked to learn in evidence that the government have spent more than a year failing to set the level of fine the GCA can seek when she finds against a retailer. This leaves her unable to use her main power, and we call on the government to set that fine immediately,” she said.

The report also recommended the government help dairy producers increase global exports and to press for clearer “country-of-origin” labelling on products.

Last week SM reported First Milk’s announcement it would defer payments to farmers by two weeks in response to financial pressures caused by a fall in dairy prices. First Milk, a co-operative owned by around 1,300 farmer members, predicted the move would improve the business' cash flow by £10 million. The organisation also increased members’ financial contributions to the business, which had revenues of £530 million in 2012-13.

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