Muller flag with logo© Tim Scrivener

Dairy farmers who represent Muller have described heated exchanges with company representatives during consultations over a new contract.

Some producers have described the implementation of the new deal as tantamount to blackmail, with some claiming Muller had warned they would lose out financially if they decided to delay adopting it.

At the centre of the dissent is the winding down of the Direct Milk DPO, whose 650 members will join the Muller Milk Group’s (MMG) 1,250 producers under one central contract.

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As part of the integration, the MMG board will be replaced with a new body, the Muller Farmer Forum, made up of 21 elected representatives, nine of which will be non-aligned producers.

Muller has defended the changes, describing them as necessary to facilitate a fair and vibrant supply chain with less producer exposure to the boom and bust of global commodity markets.

Backward step

But, anonymous producer group Muller Non-aligned believes that losing the PO is a backward step.

“[The new body] can never effectively replace the existing Direct Milk DPO in providing legitimate negotiation on milk pricing or contractual terms,” said a spokesperson.

The group also criticised the forum’s proposed lack of financial independence.

“It is our opinion that there can be no benefit to the non-aligned producer in the formation of a farmer board that cannot negotiate on contractual terms or milk price.”

Further contentious changes include the requirement for a quarterly milk forecast in which producers will have to predict their milk production for up to four months in advance within a 5% degree of accuracy or face deductions.

Milk constituent levels under the new contract must also be above 4% butterfat and 3% protein, and producers must deliver below 30,000 bactoscan and 250,000 somatic cell count, or face further price penalties.

Despite the backlash, Muller group communications director Graeme Jack said recent meetings had been “constructive and sensible”.

“The new contract will bring benefits for the whole of the supply chain and will ensure Muller continues to offer a sustainable, competitive price for all of the milk we buy from producers.”

“It’s important to stress that we are seeking feedback and discussion around the contract and farmer representation proposals.

“We’ll take what we have learned into consideration before reaching final positions.”