Dairy UK, a trade association for British dairy farmers and producers, released a statement that it supports the government's recent call to extend the mandate of the Groceries Code Adjudicator (GCA) to cover smaller businesses and the food service sector.
It said smaller-size retailers 'can exercise significant market power with smaller suppliers' and said the food service was 'of growing importance'.
During the consultation period about the expansion of the GCA's remit, Dairy UK's submission said that the adjudicator has had a 'positive' effect on commercial relationships in the grocery market.
But Dairy UK maintained a firm stance that the adjudicator's jurisdiction shouldn't be extended to cover dealings between dairy farmers and milk purchases.
Chief executive Judith Bryans said that "giving the GCA any role in regulating contractual relationships could lead to the GCA becoming the focal point for price disputes throughout the industry. This would be unwarranted as there is no systemic failure in the UK market."
Dairy UK insisted that the country's dairy markets are run efficiently and operate within EU norms. The market for raw milk is competitive without any one purchaser holding a monopoly, preventing buyers from being able to set prices against the prevailing market trend.
The body also emphasised the fact that price fluctuations is an 'inherent' feature of deregulated agricultural commodity markets, and that the UK experiences a level of price volatility consistent with other EU states and international milk-producing heavyweights. It stated that there was a high level of price transparency that still allowed competitors to guard commercially sensitive information.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Martha Sparrius. To subscribe to ESM: The European Supermarket Magazine, click here.