Dairy Farmers of Britain: What the collapse will mean for members

The NFU has prepared a more detailed Q&A for farmers affected by the DFoB collapse, which it is updating as more information becomes available. Click here to go to the NFU site


Here is a brief overview of the situation






Talk about the demise of DFoB with other producers on our forums



Read Phil Clarke’s Business Blog on how the banks should treat DFoB


What does the appointment of an administrator mean?


Dairy Farmers of Britain has gone into receivership. The business of DFoB is now being managed by the receivers, PriceWaterhouseCoopers, who will act as agents for DFoB. The effect of the receivership is that the business will be run by the receivers. This allows the receivers to try and sell the business itself or parts of it.


Will my milk be collected?


The receivers say they hope to be able to collect and distribute the majority of DFoB’s milk for the foreseable future. The receivers have said DFoB will continue trading.


Will DFoB/ the receivers pay me for my milk?


The NFU says it has been told that milk suppliers will not be paid for milk supplied in May or early June, before the receivers were appointed. Industry organisations and farmers’ representatives are calling on the receivers to clarify this as soon as possible.


If DFoB receivers admit they will not collect milk, FW understands this could represent a ‘repudiatory breach’ of contract, technically releasing members from their contracts with DFoB.


The NFU says it understands that from 3 June, DFoB under receivership management will buy milk from members at an unknown price.


PWC receiver Stephen Oldfield is reported as saying DFoB members producers would not “handcuffed” to their contracts.



“We will be issuing new contracts which will cover an initial two-week period and will then be renewed on a rolling four-week basis. Members have to make the choice to sign that contract or find other processors to take on their milk,” he said.


What should I do?


Farmers affected should examine their contracts carefully. FW understands that, while contracts do still stand until a breach is committed – such as DFoB failing to collect members’ milk – farmers could make arrangements with other milk buyers as it seems unlikely a company in receivership would pursue farmers for breaching individual contracts.


However, while the business is still trading and hopes of a successful settlement remain, the receivers are urging farmer-members to continue to support the co-op.


The NFU has prepared a more detailed Q&A for farmers affected by the DFoB collapse, which it is updating as more information becomes available. Click here to go to the NFU site


 






DFoB member? Distressed or troubled about what the news might mean for your business? Don’t suffer in silence – www.farmcrisisnetwork.org.uk