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The Grocer Talking Retail

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Compulsory dairy contracts get go-ahead from government

Dairy processors face being locked into compulsory milk supply contracts for the first time, after the UK government and devolved administrations agreed to create a new code of conduct for the sector.

The new code would “provide a guiding framework, establishing minimum standards but also providing businesses with the flexibility to adapt contracts to their individual circumstances”, it added.

Officials are looking at a raft of options over how the new code will be enforced, ranging from advisory panels to an independent adjudicator model – similar to the Groceries Code Adjudicator. “We will consider all evidence and will continue to work with industry to design an effective enforcement mechanism,” suggested a Defra spokeswoman.

The long-awaited code follows a 12-week consultation into tackling unfair practices across the sector last summer. It would ensure a “fairer dairy supply chain”, Defra added, after environment secretary George Eustice had previously admitted the sector’s voluntary code “had not worked”.

Source: https://www.thegrocer.co.uk/dairy/compulsory-dairy-contracts-get-go-ahead-from-government/652775.article Feb 4 | Competitor News | What's Trending
Defra said a statutory code would be introduced later this year, with full implementation expected in about 24 months to allow for further consultation and to give “industry time to adapt to any new requirements”.