Arla proposes £90m investment to expand Scottish dairy

Arla Foods has announced plans to invest nearly £90m in its Lockerbie site in Scotland, as it aims to strengthen UK dairy production.

The investment will focus on creating a “centre of excellence” for UHT and Lactofree milk, supporting future growth for the farmer-owned co-operative.

This proposed investment follows Arla’s £300m of site developments announced in 2024, including a £34m investment in Lockerbie’s cheddar production. The new funding will enable Lockerbie to expand further.

See also: Arla farmers to receive share of £242m dividend

NFU Scotland milk committee chairman Bruce Mackie said: “There is tremendous potential for raw milk production in Scotland and this investment in stainless steel and innovation north of the border is not only welcome, but it must send a clear signal to other milk processors about the huge potential to invest in Scottish dairying and that we are open for business.” 

As part of the proposal, Arla plans to relocate to Lockerbie all operations from its Settle creamery in North Yorkshire, and some operations from its Stourton dairy in West Yorkshire.

Settle, which produces UHT and Lactofree milk, will close by the second half of 2026.

Consultation 

Arla has committed to entering a collective consultation period with all affected employees to address the changes.

In response to the potential impact on staff, an Arla Foods spokesman said: “We do not envisage any redundancies at Stourton and expect colleagues to be redeployed into equivalent roles at the site.

“We will begin collective consultations on or before 13 March 2025 with colleagues at Settle to thoroughly review the proposals and all available options.

“A total of 152 roles are affected by the proposals, but we are planning to create approximately 90 new roles at Lockerbie if the proposal goes ahead.”

The investment proposal aligns with Arla’s goal of improving the UK food industry’s role in tackling health challenges and nourishing a growing population.

Fran Ball, vice-president of production at Arla Foods, said: “The proposals announced form part of our strategy to strengthen our manufacturing network and future-proof dairy production in the UK.

“While this is an exciting announcement for Lockerbie, our priority right now is to support our Yorkshire colleagues.”