Mark Allen, CEO of Dairy Crest, has raised concerns with the current drafting of the Voluntary Code of Practice following a price decrease announced today, and effective within 3 days, by one of its competitors.

Commenting on recent competitor activity, Mr Allen said "This latest price reduction shows the Voluntary Code of Practice is not working fairly for the British dairy sector – for farmers or processors.

“At Dairy Crest we have been firmly committed to making the Voluntary Code work since we were the first to sign up in summer 2012.  We have brought out two formula priced contract options for our farmers, changed our notice periods on our contracts and worked very hard to ensure the Code operates across our whole supply chain.  I find it unacceptable that today a major milk purchaser has provided just 3 days’ notice of a significant milk price reduction to their supplying farmers. Those farmers are now contractually tied in for 12 months.   

“This is especially concerning following a period of aggressive recruitment.  Farmers have been put under significant pressure to move just before the price reduction was announced. This is yet another example of the current Voluntary Code not providing a level playing field. It is essential that the Voluntary Code Review addresses this disparity and prevents a repeat of this situation happening in the future."

Commenting on milk price Mr Allen said “Dairy Crest has a track record of paying fair, market-related prices, with no hidden adjustments or the requirement for capital deductions. As a British company, we agree our own prices with DCD and I can assure all of our farmers that we will continue to remain true to our own milk price model which provides stability for farmers within a volatile market place.   

“We are also continuing to explore global opportunities which complement our business by adding value. Construction is now well underway on our exciting £45 million investment at Davidstow where we will be producing demineralised whey powder, the base ingredient for the growing global infant formula market.”