Direct milk suppliers grow restless
UNREST among milk producers who supply dairy companies directly appears to be growing.
The Milk Group will kick off the New Year with 100 extra suppliers after members of the Essex and Herts and SKS (Surrey, Kent and Sussex) groups, both of whom had supplied Arla Foods, agreed to join its ranks.
The new supply contracts, which come into affect from Apr 1 this year, are worth an extra 100m litres for the Milk Group which will now sell over 700m litres of milk a year.
Chairman of the Essex and Herts group Robert Torrance told farmers weekly that after protracted negotiations the group could not see any prospect of price rises which it felt were justified.
"From January onward, when we felt there was scope for an increase, there was still no more money on the table. So we began talking to other groups."
Mr Torrance said direct suppliers had got themselves into a weak bargaining position. "In some cases producers are getting tied up in contracts that last for 12 months and they cant get out of them."
He hoped that by handing over negotiations to the Milk Group that his members – who whole-heartedly voted for the move – would get a better deal. No one from Arla Foods was available to comment.
Last month, Cheshire-based milk group Waterford Farmers voted to end their contract with Express Dairies. Other suppliers are said to be considering following suit. *