Plans to promote fairness and transparency in the UK dairy sector through new regulations have been welcomed by industry bodies.
The Department for Environment, Food & Rural Affairs (Defra) has introduced new rules aimed at enhancing fairness and transparency in the UK dairy industry. These regulations allow farmers to challenge their payment terms from supermarkets and other buyers, as well as making it easier for them to raise concerns regarding supply contracts.
The National Farmers’ Union (NFU) has praised the forthcoming regulations, stating that they represent a significant step forward towards creating a more equitable dairy sector. Dairy farmers have long been dissatisfied with the prices they receive for their liquid milk, particularly from supermarkets.
The government unveiled the regulations on 12 July, following the Farm to Food Summit held in May. The aim of these regulations is to establish stability and accountability across the dairy supply chain, empowering farmers to contest prices and prevent unilateral changes to contracts. This move comes in response to feedback from farmers and processors, as the government sought to address previous concerns and provide tailored support for the industry.
Farming minister Mark Spencer emphasized the importance of fair payment to farmers and highlighted how the new regulations would create price certainty and stability. He further emphasized the government’s commitment to promoting fairness and transparency across food supply chains, with future plans to review the egg and horticulture sector supply chains.
The government is also working on regulations to improve relationships in the UK pig supply chain.
Under the new dairy regulations, farmers will benefit from clearer pricing terms, detailed contracts outlining the factors influencing milk prices, and the ability to challenge prices deemed unfair. Buyers will no longer be able to impose contract changes unilaterally, and farmers’ contracts will include explicit rules on notice periods and exclusivity. An enforcement mechanism will be implemented to ensure compliance with the regulations.
NFU dairy board chair Michael Oakes praised the regulations as a significant step towards fairness and transparency in the dairy supply chain. He emphasized the impact of unfair milk contracts on British dairy businesses and highlighted how these changes would provide much-needed business security, increase confidence, and help distribute risks along the dairy supply chain.
A spokesperson from Dairy UK stated that it is crucial for the regulations to strike a balance between transparency and industry competitiveness. They appreciated the engagement provided by Defra throughout the development of the regulations and expressed their commitment to collaborating with Defra on their implementation.