Muller puts more milk producers on 12 months’ notice

A number of dairy farmers supplying Muller in North Wales and Scotland have been issued with 12 months’ notice to their supply contracts, and been told their last milk collections will be on 31 March 2027.

Muller producers received a letter including a termination notice on Monday (30 March).

It stated that the current market environment continues to be “challenging” for both dairy farmers and processors alike.

The letter says Muller had to take “difficult” decisions to protect the long-term sustainability of its business and the wider UK dairy supply chain, driven by ongoing market pressures and continued unprecedented levels of oversupply of milk.

See also: Muller plans up to 90 redundancies at Skelmersdale site

Writing to producers, Richard Collins, agricultural director at Muller, said: “Recent adjustments in our contracted volumes mean the total amount of milk we are contracted to process for the UK market has changed.

“To ensure we manage our supply of raw milk responsibly and maintain a sustainable balance between milk intake and processing demand, we have no choice but to make adjustments to our supply base.”

Numbers 

The exact number of producers who have been served notice has not been disclosed.

Industry sources suggest it is likely to be between 50 and 100 producers, although Farmers Weekly understands that more than half of these producers will be offered to move to an ingredients-only contract.

A spokesman for Muller Milk & Ingredients said: “Milk production continues to exceed shopper demand for fresh dairy products in the UK.

“And following a recent adjustment in our contracted volumes, we have been reviewing our supply base to ensure the milk we collect from farms is aligned with the amount we need to process for the domestic market.

“To responsibly manage this balance, some supplying farms have been issued with a full year’s notice.

“We discussed this regrettable but necessary approach with farmer representatives ahead of notifying suppliers, and we will provide support throughout the transition.”

Supply base 

Grant Hartman, chairman of dairy producer organisation MMG Dairy Farmers, told Farmers Weekly that Muller’s liquid volume had come under pressure, and it had to rebalance its supply base accordingly.

He said: “There’s a number of our members that have unfortunately been served the full 12 months’ notice.

“We, as the MMG, will work with those members to assist in any way we can.”

Some of the farmers served notice will be offered the opportunity to move to an ingredients-only contract, which will be reviewed on an individual basis.

Mr Hartman said: “We have managed to get a number of our members to be offered an ingredient-only contract.

“This doesn’t provide the security or visibility of a liquid contract, but at least it is a contract for some as an option.

“Over half of the number that have been served notice have got that option.”

He added: “I know a number of spring calving herds have been given the option of the ingredients-only contract.

“So, it’s very much a statement from Muller that they want level supply going forward, which meets their demand requirements.”

Mr Hartman advised farmers not to take knee-jerk reactions, but instead to take stock, assess the position, and said hopefully the dairy industry will look to change and restructure in the next 12 months.