5 July 2002

Nestlé contract fears hit Cumbria

SEVENTY Cumbrian dairy farmers, some of whom have only just restocked after foot-and-mouth, learned this week that their milk contracts with Nestlé are likely to be scrapped.

The companys factory in Dalston announced it was carrying out a milk supply review, which could see contracts dry up with dairy producers in parts of West Cumbria, the Eden Valley in East Cumbria, and south-west Scotland.

There are fears in the Cumbrian farming community that the decision could mean there is too much milk being produced in the county and that farmers will struggle to find alternative buyers.

Chairman of the Nestlé Milk Producers Group, Mike Simpson, said: "It is a kick in the teeth for those producers who have remained loyal to Nestlé at Dalston. It cannot be dressed up as anything other than bad news coming on the back of F&M and low milk prices. Many dairy farmers might decide enough is enough and call it a day."

Nestlé – which buys milk from about 300 Cumbrian farmers – blames a volatile export market for the decision to review the Dalston milk supply.

The company said in a statement: "Export markets are only slowly returning to Dalston in the wake of the F&M epidemic. As a result the factory is also experiencing a much more volatile demand for milk powder and volume planning can no longer be done on a 12-month basis.

"Under the review some farms in Cumbria will fall outside the milk requirement field, because of location or haulage costs between the farms and the factory."

It is expected that the outcome of the review will be known by the end of the summer. "We cannot guess the outcome, and the number of producers affected is a worst-case scenario," said the companys Will Mackereth.

"It depends on a number of things, including currency, the (Agenda 2000) mid-term review and the long-term sales profile from Dalston." &#42