Industry pulls together to help DFoB creditors

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The fall out from the Dairy Farmers of Britain collapse continues, with feedback from the weekend's meetings between farmers and the receiver giving just a taste of the real anger that is out there.

There is dismay that the company kept its members in the dark about its problems for so long, frustration that it over-paid for past investments and criticism at the lack of a proper exit strategy.

milk bottles.JPGMost of all, there is anger that the company continued to accept milk throughout May knowing it could not pay for it.

There is also shock at the overall level of debt that has been built up. The receiver has revealed that around £100m is outstanding - most of it to HSBC bank.

Even the bank is unlikely to get all its money back once those parts of the business that can be sold have been sold. The chances of anyone else seeing a penny are non-existent.

Against this gloomy background, however, there have been one or two chinks of light.....

 

The first is the successful sale of DFoB's Lubborn Cheese business at Cricket St Thomas, Somerset to French outfit Lactalis for a rumoured £10m. This has ensured that farmers in that area can continue to supply their local plant "as normal", while the dairy workers can keep their jobs.

The sale of the recently upgraded Llandrynog creamery near Ruthin to Milk Link has also been confirmed, coming as a huge relief to around 300 dairy farmers in the North Wales/Cheshire region.

There is no sign of any interest in DFoB's troubled liquid plants at Blayden, Lincoln and Bridgend. But it is at least encouraging that many other milk buyers have stepped forward to offer farmers alternative contracts - First Milk, Arla and Dairy Crest being amongst the front runners.

There is also evidence that the banks are trying to be co-operative. Barclays Bank, for example, has promised to offer DFoB creditors a repayment holiday on outstanding loans and has offered to extended overdraft facilities if necessary.

Of course there is still a huge amount of pain being felt, especially by those who have lost large sums of money and have not been able to find an alternative outlet for their milk.

But it is at least encouraging that so many in the dairy industry are pulling together to try and make the best of a very bad job.

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This page contains a single entry by Philip Clarke published on June 8, 2009 4:38 PM.

Farmer confusion over SFP payments was the previous entry in this blog.

Cereals 2009 relaunch for Inputs Price Monitor is the next entry in this blog.

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