DAIRY CO-OPS First Milk and Dairy Farmers of Britain are chasing £12m annual savings by pooling their milk collection and distribution activities in a new company.

The Milk Industry Logistics Company will take over the haulage of milk for the two co-ops on Dec 1, shifting up to 4.6bn litres of milk – nearly a third of the UK’s production – each year.

The move follows the establishment of close co-operation in January, when the two groups started to collect milk jointly with the aim of eliminating duplicate tanker journeys.

The new firm will function as an independent joint venture, fully owned by First Milk and DFB, and although it will be commercially driven and geared towards growth, MILC’s owners say farmers will benefit, too.

“We are not there to make profits, so any profits made will be returned to members,” said Mike Stevens, membership director at DFB. “Ultimately, the farmers have to carry the cost of transport, so it is completely in their interests.”

Haulage is the biggest cost facing the two co-ops, besides the cost of the milk itself, and each spends about £80m a year, according to First Milk’s Jeremy Hamilton.

There are hopes that the independence of the new company will encourage other milk processors to use its services.