One industry commentator quoted on the MENAFN website wrote that, “if this was France, they would be up in arms”. But this is the UK and dairy companies are just not that important.
So, is everybody happy?
No doubt the Wiseman family are, with a 35% share-holding. And the USDAW trade union seems content at the moment, with their national officer saying, “Müller does not currently have any milk production facilities in the UK, so there does not appear to be any immediate threat of rationalisation. With the current management team remaining in place, it’s highly likely to be business as usual at least in the short- to medium-term.”
Well perhaps a bit of rationalisation, says Alex White, Partner at international accountancy network BDO. “For Müller, there will be opportunities to generate significant central and some distribution costs savings,” he said. “It has flagged that it intends to carry out an operational review, but has no views on what the outcome would be, as yet it has avoided making statements about job losses, but they do look likely.
“This looks to have been a buyer’s deal in the long run.”
So Müller seems happy.
And the Royal Association of British Dairy Farmers says it’s a good move: “We see the German processor’s investment decision as part of the much needed consolidation within the UK dairy processing sector, and the fact it already operates a very modern business structure bodes well for the future,” says RABDF’s chairman, David Cotton. “Furthermore, the move is going to help to strengthen our marketing base and provide the UK dairy sector with welcome new export opportunities.”
So RABDF are happy.
We will have to wait and see if dairy farmers themselves are happy. That could be an altogether different matter. Müller dropped something of a bombshell this year when – to quote industry commentator Ian Potter – “it wished its 160 or so farmer suppliers a Happy New Year, with a letter informing them of a 0.5ppl price cut from 1 February”.
When the news broke, I asked on Twitter, What’s next? Link up any two of four? Arla Foods; Dairy Crest; First Milk; Milk Link. Or a raid from over the Channel?
I got an immediate response from a fellow journalist at the Semex conference in Glasgow. He tweeted, I don’t know, but view from the conference was that it will be the start of other significant change in the industry.
Watch this space.
Dairy? Dull it isn’t!
Geoff Platt is editor of Dairy Innovation magazine. He’s also active on LinkedIn.
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