Müller Milk & Ingredients has announced plans to reduce the amount of milk it buys in Scotland as production is outstripping demand.
The dairy processor said the “25% surge” in farm milk production since 2014, which is not supported by growth in demand for fresh milk products in Scotland, is “not sustainable” and “has significant environmental consequences”.
Consequently, 14 Aberdeenshire dairy farmers have been given a year’s notice that their supply contracts will be terminated. Müller said these dairy farmers are located in areas that present “heightened or complex logistical transport challenges”.
Surplus milk is currently being transported by Müller to England where markets can be found for it, resulting in more than 6,000 tanker movements travelling a total of 2.5 million miles each year.
The company now plans to introduce a tiered transport charge for dairy farmer suppliers in Scotland from February 2020, with the fastest-expanding dairy farmers shouldering a proportionately higher charge than those who have grown production more modestly.
The announcement follows a month-long review by Müller in which it sought input from the Müller Milk Group farmer board elected to represent dairy farmers, National Farmers Union Scotland and the Scottish Government.
“We fully appreciate that these measures will be extremely unwelcome and destabilising for our farmer suppliers particularly in the northeast of Scotland, but the current situation is unviable and we must act,” said Rob Hutchison, milk supply director for Müller Milk & Ingredients.
“We completed the largest single investment in fresh milk processing in Scotland in more than a decade at our dairy in Bellshill last year and we will continue to do what we can to stimulate new demand for fresh milk.
“But with fresh milk already in 96% of the nation’s fridges and overall consumer demand for the product in marginal decline, the reality is that it is extremely unlikely that this sector will soak up the heightened levels of milk production from farms which we have seen.
“Our farm services team will now work closely with affected dairy farmers and we will do everything in our power to help them adjust to the changes which we must now make.”
In July, Müller Milk & Ingredients announced the closure of its facility in Foston, UK, in part due to the “declining consumption” of fresh milk and significant changes in retailing.
© FoodBev Media Ltd 2019