PROCEEDINGS OF THE COMMITTEE
RELATING TO THE REPORT
MONDAY 24 JANUARY 2000
Members present:
Mr Peter Luff, in the Chair
| Mr David Borrow | Mr Michael Jack
|
| Mr David Curry | Mr Austin Mitchell
|
| Mr David Drew | Mr Mark Todd
|
| Mr Alan Hurst |
|
The Committee deliberated.
* * *
Draft Report [The Marketing of Milk], proposed by
the Chairman, brought up and read.
Ordered, That the draft
Report be read a second time, paragraph by paragraph.
Paragraphs 1 to 29 read and agreed to.
Paragraph 29 read as follows:
"It is difficult to foresee any circumstances
in which the price producers receive for their milk will rise
as a direct result of the existence of three co-operatives where
once there was Milk Marque. The Secretary of State for Trade and
Industry, when asked if farmgate prices would fall, accepted that
"that may well be the outcome". Any further decline
in income to dairy farmers would see even greater hardships in
that sector than at present and even more farmers would be forced
out of the industry. We recognise that the dependence of the milk
price on the strength of sterling indicates that even the most
powerful milk groups could not bring salvation for dairy farmers
since the guidelines used by either side to determine the price
are set in euros. However, we agree wholeheartedly with the need
for producers to co-operate in order to increase their collective
strength in the market-place and we acknowledge the concerns about
relative power following the establishment of the successor co-operatives.
It is clear that this new structure will need careful monitoring
to check that the balance of power has not swung too far in the
direction of the processors and we expect the DGFT to monitor
the market structures that now develop in order to check that
the decisions taken under pressure from the competition authorities
have had the desired consequences and do not lead to excessive
concentration of power in any one sector of the dairy industry.".
Amendment proposed, in line 11, to delete all from
"co-operatives" to end of the paragraph.— (Mr
David Curry.)
Question put, That the Amendment be made.
The Committee divided.
| Ayes, 3 | Noes, 4
|
| Mr David Curry | Mr David Borrow
|
| Mr Michael Jack | Mr David Drew
|
| Mr Mark Todd | Mr Alan Hurst
|
| Mr Austin Mitchell
|
Paragraph agreed to.
Paragraphs 30 to 50 read and agreed to.
Paragraph 51 read as follows:
"Despite this call for more sustained and imaginative
product development in the growth areas, we recognise that the
liquid milk market, while in decline, is still highly important
to the industry. Concerns were raised that the development of
longer-life fresh milk could lead to liquid milk being imported
into the UK. However, as the Secretary of State pointed out, the
UK industry "should see it as an opportunity and not a threat.
There is a market of 370 million in the European Union".
The record of UK investment in liquid milk is better than in other
dairy products, with examples given to us of new types of milk
(goat's, variable fat content, vitamin-enriched, for instance)
and new packaging, but there is still room for improvement. Mrs
Hadley complained of the unimaginative cartons and flavours of
milk aimed at schoolchildren and it is clear that the industry
is failing to exploit the opportunity of appealing to children
through branding and special packaging, as has been done in the
yogurt sector with great success. We note that the NDC expected
the packaging of milk to be "an area which will be much more
vibrant over the coming years". The NDC also recognised that
"some products ... do just replace existing products"
in this market and that to create added sales meant "new
packaging formats, new sizes, creating new opportunities for drinking
milk". We agree and also suggest that it is worth re-examining
a traditional area, namely school milk. We recommend that the
Government review the school milk subsidy and examine whether
a revised scheme, allied with industry initiatives such as generic
marketing, might boost demand.".
Amendment proposed, in line 16, to delete all from
the word "milk" to end of the paragraph.— (Mr
David Curry.)
Question put, That the Amendment be made.
The Committee divided.
| Ayes, 2 | Noes, 5
|
| Mr David Curry | Mr David Borrow
|
| Mr Michael Jack | Mr David Drew
|
| Mr Alan Hurst
|
| Mr Austin Mitchell
|
| Mr Mark Todd
|
Paragraph agreed to.
Paragraphs 52 to 85 read and agreed to.
Annex agreed to.
Resolved, That the Report
be the Second Report of the Committee to the House.
Ordered, That the Chairman
do make the Report to the House.
Ordered, That the provisions
of Standing Order No. 134 (Select committees (reports)) be applied
to the Report.
Ordered, That the Appendices
to the Minutes of Evidence taken before the Committee be reported
to the House. —(The Chairman.)
* * *
[Adjourned
till Tuesday 25 January 2000 at Ten o'clock.
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