Müller announces £15 million investment in Scottish business
Shropshire-based dairy giant Müller has announced plans to invest £15 million in a business in Scotland – just days after making fresh cuts to the price it pays farmers for milk.
Müller Milk & Ingredients, based in Market Drayton, wants to invest millions over the next three years into its Bellshill Dairy as part of what it says is a "strategic review" of Scottish dairies.
But the move could also see the potential winding down of milk processing at its smaller Aberdeen and East Kilbride dairies – leaving 229 jobs and 43 farmers affected.
The move comes just days the firm cut nearly one pence per litre from the price it pays farmers for milk, blaming a downturn in the market, high levels of supply and poor demand.
Andrew McInnes, managing director of Müller Milk & Ingredients, said: "We aim to re-invigorate our fresh milk and ingredients business in Scotland and propose to invest to make Bellshill a centre of excellence for dairy, benefitting consumers, customers, employees and farmers.
"It is important to stress that the status quo is just not viable in the medium term.
"Our Scottish dairies are inefficient and costly which is putting a brake on the innovation and investment needed to stimulate new demand for dairy products."
"Our Aberdeen dairy is operating at less than 40 per cent of its capacity and milk production from farmers in the North East is far in excess of customer requirements in the area.
"Our small dairy in East Kilbride makes products including flavoured milks and potted cream and we believe that we can gain important efficiencies by relocating that production to Bellshill, which is nearby.
The firm will now start a consultation process during which it said it would "consult with its employees and their representatives".
The company said that should operations at the Aberdeen dairy be wound down, all 43 farmers supplying the site would only be able to continue supplying the business if they agreed to a 1.75 pence per litre transport charge.
Farmers in the area who don't want to continue with the company will avoid the transport charge and their contracts will terminate on expiry of the 12 months' notice.
Mr McInnes said: "We will enter the consultation with an open mind and will rigorously assess the situation and listen to our colleagues before arriving at a decision."
Yesterday it was revealed that the price farmers on Muller's standard milk price will now receive 19.15p for each litre produced following the latest cuts.
Those who began supplying to the group following the acquisition of Dairy Crest's dairies will now be paid 18.49p.
It follows a 1.35p a litre price cut previously announced by the dairy firm that was taking effect today (FRI APR 1).
