The leaked report found that making country of origin labels obligatory for milk and dairy products would disrupt cross-border trade and and increase costs - particularly for factories that would require additional traceability systems when sourcing milk from several origins.

The conclusion of the report was that origin labelling for milk should therefore remain voluntary.

The leaking of the report occurred in tandem with a statement issued by the European Dairy Association (EDA) last week which said that mandatory country of origin labelling for milk and dairy products would lead to a range of problems in the industry, including a hike in food prices, reduction of farmers' incomes and limits on the choice of ingredients available to the processing industry.

The statement came in anticipation of the official publication of the European Commission Agriculture Department's report on labelling of origin for milk next week.

The EDA said the introduction of mandatory origin labelling for such products would be very difficult to implement due to the complex nature of the dairy processing chain.

Furthermore, the EDA has questioned "the relevance of such information to the consumer", saying that traceability and food safety have been "mandatory and ensured for years under EU legislation, independent from origin labelling."

The leaked DG AGRI copy is one of two reports on labelling due to be tabled by the Commission some time next week.