31 March 1995

Now Dairy Crest striking direct farm milk deals

By Shelley Wright

DAIRY Crest has decided to source milk directly from producers in a move that will delight many dairy farmers.

Although the company would not confirm how many producers were involved, it is understood that at least three will begin supplying milk to Dairy Crests Sturminster Newton creamery from Saturday.

Compensation liability?

The producers are thought to have resigned from Milk Marque. And because they gave less than 12 months notice, they were liable to pay compensation. Although Dairy Crest would not comment, the package producers agreed with the company is thought to more than cover any dues to Milk Marque.

The company conducted its negotiations quietly. ADAS and the NFU in the south-west could not comment because both had heard nothing to suggest such a move.

A carefully worded statement from Dairy Crest confirmed that it did now operate direct contracts with producers. But a company official could not say whether this heralded the start of a campaign to secure direct supplies for all 10 of its creameries.

"Dairy Crest anticipates continuing to buy milk from Milk Marque and other sources. This will enable the company to secure the best possible milk price for the business, which has always been our objective," the statement said.

It added: "Where farmers express an interest in supplying milk directly to Dairy Crest, and it is found to be of commercial benefit, then this will always be considered – as is currently the situation in certain parts of the country."

In the build-up to milk industry deregulation last Nov, while all the other main companies tried to secure direct supplies from farmers, Dairy Crest was noticeable by its absence.

It is understood that the Milk Marketing Board, Dairy Crests parent organisation, refused to allow the company to source direct, instead insisting that it bought its milk from the MMB successor, Milk Marque.

Dairy Crest secured about 90% of its requirements from Milk Marque last autumn, and sourced the remainder from other milk groups.

Leaving date

Apr 1 is the first date that producers can leave Milk Marque. A spokeswoman refused to say how many members had resigned.

But there was no question of the figure reaching the 7% maximum that is allowed out on any one of the three leaving dates, she added.

On Dairy Crests decision to source direct, she said that Milk Marque had no comment.