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We can accept much of the European Commission's Dairy Package as currently drafted. With regard to the proposals on contracts, the Government agree with the Commission that member states should be free to decide whether to make them compulsory. We can also accept the proposals on inter-branch organisations and transparency, so long as these do not create additional burden, have funding implications, or distort inter-state trade.
Under the Commission proposals, milk producers could also collaborate and set up producer organisations. This would be a good opportunity to enhance their bargaining power. As for the scale of negotiations between milk producers and processors, we would prefer to see measures based on providing greater clarity of existing competition law and what producers may do collectively, based on the concept of a relevant market, rather than the Commission's approach of exemption from competition law and limits based upon national milk production. This would enable producers to enhance their bargaining power within the existing law.