Defra have announced that The Fair Dealing Obligations (Milk) Regulations 2024 have been laid, with commencement of the regulations due on the 9th of July 2024 for any new milk purchasing contract. Concurrently a period of transition to compliance for existing contracts is to be completed by the 9th of July 2025.
These regulations are a product of evolution from the voluntary dairy code of best practice on contractual relationships in the dairy sector that was introduced in 2012.
FUW Milk and Dairy Produce Committee Acting Chair Brian Walters said: “The voluntary dairy code was established to stamp out unfair contractual arrangements between milk producers and purchasers which could in turn help stabilise the UK dairy industry.
“Despite many processors supporting the values of the voluntary dairy code, the lack of legislation meant that some processors continued with unfair and underhanded contractual expectations leaving dairy farmers extremely vulnerable to market changes.”
In June 2020 the ‘contractual practice in the UK dairy sector’ consultation was published of which responses provided direction for the newly made Fair Dealing Obligations (Milk) Regulations 2024.
“We discussed various drafts of the regulations as a committee and the Union presented those views to Welsh Government and Defra representatives.
“Most importantly, we managed to ensure that the regulations will apply to all milk purchasing contracts across the UK which avoids any risk of creating a two-tiered market.
“Processors will now be required to review their contracts over the next twelve months in order to become compliant with these regulations, and I am hopeful that as a result of these changes there will be a fairer foundation for selling milk across Great Britain,” he added.