The study aim is to investigate why dairy co-operatives in the UK are weak or have had problems. The Milk Marketing Boards (MMBs) were set up in 1933 to ensure the fair milk price to dairy farmers. These boards purchased all milk from farmers and paid an equal milk price. In 1994 these boards were disbanded and Milk Marque came into existence. However, in 2000 Milk Marque was divided into three co-operatives. The reason behind weak position of Dairy Co-operatives in the UK are that the ideal time to form and develop the co-operatives has been lost due to MMBs. Capital constrains, lack of vertical integration, high transaction cost, interest disparity between members and management and marketing mechanism restricted the co-operatives. Hence the Co-operatives could not add value in their business and operates at lower level.