§ Sir Adam Butler
asked the Minister of Agriculture, Fisheries and Food how long it is since he received the Touche Ross report on the Milk Marketing Board and Dairy Crest; and when he expects to give his reaction to it.
§ Mr. Jopling
My right hon. Friend the Secretary of State for Wales and I received the report on 23 December 507W 1985. Touche Ross concluded that in most respects separation between the Milk Marketing Board and Dairy Crest Foods had been achieved, as required by Community and domestic legislation. However, it considered that Dairy Crest's strategy could be constrained by the board's interests in maintaining and increasing markets for milk, and that Dairy Crest Foods' rate of return might not have been acceptable to a commercial company.
The report required careful consideration and consultation with the industry. Agreement has now been reached between the Government, the Milk Marketing Board and the Dairy Trade Federation on arrangements designed to strengthen competition in the dairy industry, to ensure fair competition between all buyers of milk, to clarify the separation of Dairy Crest Foods from the Milk Marketing Board and to reinforce the Government's supervisory role. Under the existing umbrella of the milk marketing scheme, Dairy Crest Foods will become a body legally distinct from the Milk Marketing Board and will work to clearly stated commercial objectives. In the Joint Committee, which will remain the essential vehicle for negotiations on price and supplies, the Milk Marketing Board and the Dairy Trade Federation will continue to negotiate on an equal footing and to respect the requirements of United Kingdom and Community law. The National Farmers' Union of England and Wales and the Farmers' Union of Wales have been consulted and have endorsed the proposed arrangements.
I am arranging for the text of the agreement to be placed in the Library.