Suppliers in talks on 9000-farmer co-op
25 January 2001
Suppliers in talks on 9000-farmer co-op
By Robert Harris
TALKS are under way to form a new super co-op to represent 9000 farmers supplying 4.5 billion litres of milk.
Representatives of southern co-op Milk Link, its northern counterpart Zenith, the Express Milk Partnership and Dairy Crest direct suppliers have been holding meetings to explore opportunities for greater co-operation.
This could take the form of a strategic alliance or a merger. The group would continue to supply Express and Dairy Crest direct, as well as servicing existing customers.
It is not, says Milk Links operations director Neil MacFarlane, a step back towards the old Milk Marque days, especially since both Express and Dairy Crest are supportive.
“It is absolutely not about market power. It is all to do with reducing distribution costs and overheads,” says Mr MacFarlane.
Initial calculations suggest about 30% could be stripped off transport costs, the equivalent of about 0.5ppl, he adds.
But, with almost a third of the UKs raw milk at stake, the competition authorities are likely to take a keen interest.
“It is very early days,” says Mr MacFarlane. “We are actually talking to see what might work before we see the regulator.”
“We would be working with processors, not against them. They would welcome the opportunity of dealing with fewer farmers representatives.
“We are already doing a similar thing with Dairy Crest at Chard, and sharing transport with Express in a small way too.”
A new supply organisation with committed supply is likely to prove popular among farmer members, says Richard Smith, chairman of the Express Milk Partnership.
“But, obviously, producers in all the groups will have to be consulted. I wouldnt like to put a time-scale on developments – lets see how the talks progress.”