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Haulage threat as milk giant goes sour
Page 8
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• by Emma Penny The owners of Britain's biggest dairy processing company have gone into receivership, and haulage companies are likely to bear some of the fall-out.
The United Milk plant at Westbury in Wiltshire is owned by United Dairy Farmers, and has a daily capacity of 2.4 million litres.
Receiver PricewaterhouseCoopers is now in negotiations with three other dairy co-upsDairy Farmers of Britain, First Milk and Milk link —in the hope that a consortium can rescue the factory after the company ran out of money.
One of the key hauliers involved, Turners of Soham, has around 20 tankers delivering milk to United Milk, carrying 64)0,000 litres a day; 50 Turners staff are involved with the contract.
Turners has been working for United Milk on a rolling contract for the last three years.
"It is unlikely that the dairy will be sold for anywhere approaching its debt, so no doubt there will be losses involved," says Turners managing director Paul Day.
He declined to say how much the contract was worth, or how much the company is owed by United Dairy Farmers. Other hauliers working at Westbury declined to comment on the matter.
However, the receiver has written to farmers supplying the plant saying that the best way to secure Westbury's future is to continue supplying it with milk. PricewaterhouseCoopers says It Is Intending to continue with business as usual In the immediate term; however a report on the Farmers Weekly Interactive website (www.fwico.uk) says that United Milk has not had sufficient funds to pay farmers for milk supplied from 1 July.
• First Milk and Dairy Farmers of Britain are to co-operate to cut am a year from their haulage costs. The two co-operatives are rolling out an extensive haulage integration plan this autumn, which will see all of their overlapping ex-farm and reload operations shared by autumn 2004.
The firms say it will create a fully-integrated national milk field of about 4.5bn litres, covering the whole of the UK, and will also result in a significant reduction in 'food miles' in the milk sector.
The move follows earlier projects with key customers which have rationalised haulage and highlighted the potential benefits of wider integration.
Under the proposed restructuring, joint collections will begin this autumn, eliminating duplication of milk tanker routes. This should deliver immediate savings of .£5m, and precedes complete integration of the two haulage operations within a year.
First Milk is a co-op owned by its 4,000-plus dairy farmer members in England, Wales and Scotland.