A UK-wide 12-week consultation on the introduction of mandatory terms for milk contracts has been launched by the Government.
This follows a review of supply chain fairness by the groceries code adjudicator which found an uneven distribution of power in the dairy supply chain.
Laws on compulsory written milk contracts between farmers and processors have been introduced in 13 EU member states in recent years, including France and Spain. The Australian Government has also recently introduced a mandatory dairy code of conduct.
The consultation questions include pricing, volume and timescale issues, termination and notice periods, flexibility within contracts, bonuses and deductions, exclusivity clauses and methods of dispute resolution.
It also asks whether producer organisations should be promoted as a means of improving the bargaining balance in the supply chain. Farm minister Victoria Prentis said: “It is absolutely vital that our dairy farmers are paid fairly for their high-quality produce and I am committed to cracking down on any unfair practices within the UK dairy industry."
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