Business Profile: Ronald Kers, CEO Muller UK and Ireland

Famous for big brands and eye-catching advertising, Muller Dairy UK & Ireland is the biggest yoghurt maker in the UK. Gemma Mackenzie speaks to a man on a mission to make his company the biggest dairy in the country.

Why should milk producers stay with or join Muller?

Our non-aligned price is market-leading and a clean and simple scheme. We are ambitious – no one has invested as much in the UK as we have. In the past two years we have invested £500m. It’s a sign of the confidence we have in the business and the industry. We do feel that we can make a big difference.

How many additional producers do you plan to recruit over the next five years and how?

At the moment we are 70% self-sufficient but we are looking to reduce exposure to third-party suppliers.

We believe it’s better to have direct relationships with our farmers and it gives us more control of our own destiny.

We would like as many dairy farmers as possible to realise their ambitions with us – 400 farmers over the next few years.

We have the 1p/litre recruitment incentive (see below) and have also just launched the Muller Wiseman Milk formula contract, which starts at 32.27p/litre. It’s a new type of contract; it’s very transparent and it makes sure that we are fully compliant with the code.

What are your plans for the company?

Muller in a minute

  • Muller UK & Ireland Group is wholly owned by the Unternehmensgruppe Theo Muller based in Germany.
  • Twenty-one sites nationwide with about 6,000 employees across three business units – Muller Dairy, Muller Wiseman Dairies and Muller Minsterley chilled desserts including Cadbury products).
  • UK’s leading yogurt manufacturer with major brands such as Muller Corner, Mullerlight and Muller Rice.
  • UK’s largest butter plant at Market Drayton, Shropshire, due to be commissioned by autumn 2013 – investment of £17m.
  • Group turnover increased from £450m in 2011-12 to £1.5bn in 2012-13.
  • Supplied by 1,094 producers with 381 non-aligned and the rest aligned to major retailers via the Muller Wiseman Milk Group.
  • Standard litre non-aligned price of 31.5p/litre in June, compared with 26.42p/litre in June 2012. Volume bonus worth up to 1p/litre on all litres produced for existing and new suppliers, plus a 1p/litre recruitment incentive.

We have a plan for the next five years to be the largest and most competitive dairy company in the UK.

We want to have the most producers and have the biggest share in the industry – with that I need the greatest amount of milk. We started as a yoghurt company and we bought Wiseman in 2012.

We are now building a butter plant and we are actively looking at other areas of dairy. In the future, I would envisage us being in other segments of dairy.

What are the major threats and opportunities for UK milk processors and how should the industry respond to them?

More than £2.2bn worth of dairy products are imported into this country but we are only exporting £1bn worth.

It really surprised me when I came to this country – why are we not using more British milk?

I think there are really big opportunities in that area and we want to at a first stage displace imports. In the next stage we want to start exporting.

What are the major threats to and opportunities for Muller UK & Ireland and how do you plan to respond to these?

I think we are very well placed to capitalise on the opportunities for the displacement of imports but also growth in the domestic market as well as getting into the export side.

We will continue to build our portfolio of products and we will maximise the value from the milk that we buy.

What did you change in the business after the SOS Dairy campaign?

We have been one of the leading companies to execute the adoption of the voluntary code of practice and changed our base contracts to adopt that.

Unfortunately, I think there are a few laggers and that’s created some issues. It’s quite incredible the co-ops always claim to do everything in the best interest of the farmers – then why won’t they adopt the three-month notice period?

We as a company have been running with three-month notice periods for the past 20 years. I think that’s a real issue that I see in the dairy industry that it’s not a level playing field and I know that farmers are angry about this.

What makes Muller different from other dairy processors?

We have a clear strategy, are very determined to succeed, have a proven track record and we are very ambitious.

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