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Milk price drop proves need for Ombudsman says Farron

February 3, 2009 9:11 AM

Shadow Secretary of State for DEFRA Tim Farron MP has called on the government to press ahead with the introduction of a supermarket Ombudsman in the wake of the decision taken by milk processor Wiseman Dairies, to slash the price it pays to its farmers by 2p per litre.

Mr Farron has responded to the Government's stalled attempts to introduce the Ombudsman by tabling an Early Day Motion in the House of Commons calling for the creation of a market regulator with the power to establish proper pricing calculations irrespective of the pricing trends of the major supermarkets.

Tim believes that a genuine supermarket regulator will have the power to provide greater protection to the dairy industry which will aid the development of a long term, trusting relationships with the supply chain.

Commenting Mr Farron said:

"We've lost £2 billion litres of milk production in the last 3 years as more and more dairy farmers leave the industry.

"Britain now imports record amounts of milk - all because farmers are getting such a poor return for their efforts. Meanwhile processors and supermarkets have increased their margins considerably. This is unfair and action is needed now.

"It's inevitable that the supermarkets and the large processing companies are opposed to an ombudsman because they don't want to be forced to pay farmers a fair rate.

"Its about time that the government understood this and pressed on with plans to bring fair trade for British farmers and a fair deal for the consumer - powerful vested interests must not be allowed to stand in the way."

1. EDM entitled UK Dairy Industry

That this House welcomes the beginning of National Dairy Week; notes and is saddened by the reduction in the number of UK dairy farms; notes with concern Wiseman's decision to reduce its milk price by 2.2p per litre and the announcement by Dairy Crest that they would cut its February milk price by 1.75ppl and its Davidstow price by 1ppl; expresses concern that the quota price of milk has crashed from approximately 32 pence per litre in 1988 to approximately 1 pence per litre in 2008; recognises that although the selling price of milk has increased, the share going to farmers has fallen since 1995 from 24.5p to 18p; acknowledges the role played in this by major supermarket chains in pushing down the price of dairy products with little regard for the need to get a fair price for farmers; and calls upon the Government to act to protect dairy farmers by introducing a genuine supermarket regulator to establish a proper pricing calculation, based on a transparent pricing formulae, that is detached from commodity pricing and which develops long term, trusting relationships with the supply chain.