Commerce and council at odds over milk compensation

Last year the department was ordered to report back on whether there should be a payment as a result of a States decision to allow shops and supermarkets to deal directly with the Dairy.

In a report to be debated in March, based on an independent study, the department says this could cost up to £1.1m.

'By a majority, and with all due respect to the intentions of States members when directing the department to make a further study of this matter, the department resolved that it could not propose the payment of financial mitigation, even if it was seen as a way of ending the debate surrounding provision of the Dairy with a realistic level of commercial flexibility to operate for the good of the island and in support of the strategic vision for the dairy industry,' it said in the Billet d'Etat.

'The department therefore remains opposed to the principle of making an ex-gratia payment to the existing milk distributors and does not believe that the independent report changes that view.'

However, the council – on which Commerce and Employment minister Kevin Stewart sits – has taken the opposite view, despite the report outlining that legal opinion received by the States places no obligation on it to pay compensation.

The payments are, the report says, ex-gratia because the 23 distributors will face increased business risk with more competition in the market.