Milk co-op Dairy Farmers of Britain has announced it is to pull out of its stake in Westbury Dairies.

DFoB’s exit from its joint venture will leave co-ops First Milk and Milk Link to assume full control over the site. First Milk will have a two-thirds stake in the new business.

DFoB has agreed a long-term supply arrangement which will allow it limited access to balancing capacity when it needs it. Westbury was set up to cope with processing the spring flush of extra milk, but has been branded a white elephant by some, as the industry has sought to move to a more level annual production profile.

“The move reflects the fact that the business has less of a balancing requirement than it used to,” said a spokesman for DFB. “The co-op has also become a significant processor in its own right, which means we now have balancing capacity at our own facilities.”

Volatility

In a statement the two remaining partners said: “Both strongly believe that in the light of the ongoing volatility in dairy ingredient prices and UK milk production, Westbury Dairies will not only provide them with the security of having full access to the UK’s foremost balancing facility but also there is potential to develop the business.”

Will Sanderson, Milk Link’s corporate affairs director, said that with member production volumes stable, the co-op needed access to a balancing facility with volume and quality.

Small profit

Milk Link had been in operational control of the plant for the past 12-18 months and by delivering greater efficiencies it had returned a small profit in the last financial year. “And we do believe that we can develop the business further,” he said.

Paul Flanagan, First Milk Group Communications director, said discussions were ongoing about the way forward but it was a positive development. “From our point of view there are clearly periods of time when we need the balancing facility. Westbury definitely has a place.”