In a recent report on the health of the dairy market, the Commission said it had serious concerns about the distribution of value-added in the dairy supply chain. But in an interview with Dairy Reporter, Dairy UK director general Jim Begg dismissed suggestions that manufacturers are creaming off profits created by low producer prices.
Begg also responded to allegations in the Commission report that the dairy supply chain does not function efficiently.
He said some European governments were distorting competition by intervening in the market to establish collective agreements with the aim of increasing margins in the supply chain. The spokesperson for the UK industry said the EU will probably look into supply chain efficiency but that it is difficult to see what remedies they can come up with.
With dairy prices at record lows Begg said it is vital that the economy picks up to boost demand. He said dairy companies are playing their part by introducing new products and presenting old products in new formats. In short the answer to low prices is “get more milk out of commodity markets and into value-added markets,” said Begg.