30 June 1995

Scottish Pride owns

up to share errors

MISTAKES were made in allocating company shares to dairy farmers, Scottish Pride chairman Lord Sanderson has admitted.

Scottish Pride, the commercial arm of the former Scottish Milk Marketing Board, issued shares to qualifying dairy farmers when the milk industry was de-regulated last Nov.

Dairy farmers still hold the majority of the shares in the company. But producer disquiet surfaced recently with accusations that farmers had been unable to secure shares when they stood at 38p, while Scottish Pride directors, including Lord Sanderson, had successfully bought at that price. The share price has subsequently soared to more than 50p.

Lord Sanderson said at the show that an investigation by stockbroker Allied Provincial had uncovered one incidence where a prospective purchaser was wrongly told that shares were not available.

He blamed human error, and said that Allied Provincial had apologised to him for the mistake. The farmer concerned had since received his requested shares, at 38p, and the stockbroker met the cost of rectifying the mistake.

The handling of shares, and producer fears over Scottish Prides failure to communicate with its shareholders, led more than 200 dairy farmers to form the Scottish Pride shareholders association in recent weeks.

Lord Sanderson invited association secretary Michael McReath to supply any further information he had on other farmers who were unhappy with Allied Provincials handling of the shares. He said that he might consider an independent inquiry into the share trading, adding that Scottish Pride had no special allegiance to Allied Provincial. "We inherited them from the SMMB," he explained.

"I want to settle this thing once and for all. I am concerned if the stock brokers have made errors because it unsettles people – the last thing we as a company need. The more the shareholders group complains, the more difficulties we have running the business," he said.

Lord Sanderson also assured producers that, despite rumours to the contrary, the company had no intention of closing its island cheese factories, or its Kirkcudbright UHT plant. These facilities remained an integral part of the companys future success, maintaining the wide product portfolio that set Scottish Pride apart from its competitors, he said.

Scottish Pride will shortly announce its years trading results. Lord Sanderson said he was confident that the changes made since deregulation – which he described as radical – had set Scottish Pride on course to become a very successful company.n