Partners in Cheese and Dairy Crest Direct’s Cumbrian members are back round the negotiating table following the surprise intervention of supermarket Asda.

The talks, which collapsed earlier this month, concern a deal that would see the 200 DCD farmers supplying milk to PiC’s proposed £50m cheese factory at Workington.

Milk from the farmers currently goes to the Aspatria cheese factory, which was recently bought from Dairy Crest by dairy co-op First Milk in a £62m agreement.

Dairy Crest has said it will honour its contracts with the producers until October 2007, but after that they will be looking for a new buyer.

Lower milk price

First Milk is keen for them to join the co-op, but many are unwilling because of the lower milk price on offer and the capital retentions that would be levied on them.

PiC was one of four other options open to the DCD farmers. But Ronald Akkerman, the Dutch entrepreneur behind PiC, accused them of dragging their feet over his proposal. He then withdrew his offer two weeks ago.

In reply, DCD said that Mr Akkerman had failed to provide it with sufficient details of his business plan for the proposed factory.

Asda, however, got the two parties talking again at a meeting in Leeds on Dec 12, where a consultant from Bidwells spent three hours evaluating PiC’s business plan.

‘Bizarre’

Some within the industry have called the move by Asda, which buys most of the cheese from Apatria, as “bizarre” and “provocative”.

Chris Brown, Asda’s head of ethical and sustainable sourcing, admitted to bringing PiC and DCD back together but said it was up to the farmers who they wanted to supply.

Following Asda’s intervention, a meeting involving the farmers, regeneration body Cumbria Vision, which is backing the project, and Mr Akkerman is due to be held tomorrow (21 Dec).

But Mr Akkerman said he was no longer negotiating through DCD and would be asking its members directly if they wanted to join him. Those prepared to do so would be asked to pay £250.

Committed to joining


Mr Akkerman said he was aiming for a provisional board of the West Lakes Cheese Co-operative, which would supply the factory, to be set up prior to the meeting. The board would then use the £250 payments along with funding from Cumbria Vision to pay for an independent due-diligence study on PiC’s proposals by the beginning of January.

If the results of this proved acceptable to the board, those farmers who had paid the £250 would be committed to joining the project.

Mr Lowrey said the PiC bid was still an option his members should consider and he hoped to present all the options in detail to them by the middle of January.