They have already had their price cut by 2p/litre from 1 June, but a move onto Wiseman’s standard contract would see them lose almost another 0.5p/litre, although some may be able to join its A2 milk contract, which attracts a 2.5p/litre premium.
Müller will give its suppliers at least a year’s notice on its current contract at the beginning of July 2012.
The companies aim to switch all Müller producers onto one of the two contracts by the end of the year as part of wider plans for integration of milk supply arrangements following Wiseman’s acquisition by Müller earlier this year. The existing 1,100 Wiseman suppliers are not affected by the changes.
“The processing sector is evolving and we want to ensure that Müller producers have all the information and time they need to adjust to this change and make the right decisions for their businesses,” Pete Nicholson, Wiseman’s milk procurement director, said.
He insisted the Wiseman contract offered no hidden penalties, capital retentions, balancing or transport charges and a notice period of three months for most of the year. Any changes to milk price were also subject to a month’s notice, he said.
Both firms have a strong presence in Shropshire and over time, the farm services support and milk collection logistics are due to be integrated to improve efficiency.