Further consolidation within the dairy sector is being called for by the All Party Parliamentary Group for Dairy Farmers, with discussions involving each of the three co-operatives, First Milk, Milk Link and Dairy Farmers of Britain being scheduled with the group's chair, Daniel Kawczynski. The Royal Association of British Dairy Farmers, the APPG's secretariat is organising the meetings within the next few weeks, after Parliament reconvenes.
Mr Kawczynski's move follows a meeting with Farmers For Action at which David Handley reinforced the need for merger between the three co-ops in order to improve the sector's competitiveness, efficiency and marketing clout.
"Co-op merger has been part of our campaign over the last six years," said Mr Handley. "During that period we have witnessed dramatic rationalisation among producers, however we have not seen the same trend within the processing sector. We need to take costs out of production, and here we have in effect three major PLCs competing against each other. However, I have been told on three occasions by the Office of Fair Trading that they have no objection to the three co-ops merging into two co-ops."
Very few mergers in the dairy sector raise competition issues, according to OFT's director of mergers, Simon Pritchard. In a recent meeting of the APPG in the House of Commons he commented: "We only intervene in the select minorities."
Daniel Kawczynski commented: "I am very flattered that so much interest is being demonstrated in the APPG which reflects the need for establishing such a group. I am very grateful to RABDF for facilitating industry meetings to bring about change, which is so desperately needed."
RABDF chairman, Tim Brigstocke added: "We find it encouraging that industry influencers are meeting with the APPG. It is a measure of the current state of the industry, and it reinforces just how important Parliament should be in creating a sustainable industry."