Press Release: European Commission proposes new measures to improve future stability in the dairy sector

The European Commission on 9 December 2010 adopted a proposal on "contractual relations in the milk sector". The proposal aims to boost the position of the dairy producer in the dairy supply chain and prepare the sector for a more market oriented and sustainable future. It provides for written contracts between milk producers and processors, the possibility to negotiate contract terms collectively via producer organisations in a way as to balance the bargaining power of milk producers relative to major processors, specific EU rules for inter-branch organisations and measures for enhancing transparency in the market. The measures are proposed to be valid until 2020 with two intermediate reviews. Appropriate size limits for collective negotiations and other specific safeguard measures should ensure the achievement of the objectives of strengthening the bargaining power of milk producers whilst safeguarding competition and the interests of SMEs. The Commission also adopted a report on the dairy market within the context of smoothly phasing out the milk quota system.