Lactalis gives notice to 12 dairy producers in Scotland

Global dairy processor Lactalis has served notice to 12 of its farmer suppliers in south-west Scotland.

Affected producers have been given 12 months’ notice to try and secure a new processor.

The Lactalis site in Stranraer, Dumfries and Galloway, is supplied by farmers through the Milk Suppliers Association, which is a co-operative representing 131 dairy farmers in the region.

See also: Tesco to cut producers from its sustainable dairy group

It is understood the decision to drop producers was made following a business review looking at supply in the wider area.

NFU Scotland has expressed its anger at the decision and has called for a meeting with Lactalis and the Milk Suppliers Association.

NFU Scotland vice-president Andrew Connon said it appears producers are to be dumped out of their current contract without clear reasoning and with few options to find alternatives.

“There must be clear protocols built into contracts that protect a producer, when a processor faces a challenging market for its products and passes the problem on to those supplying it,” he said.

“Without greater protection for producers in contracts, this will continue to happen, allowing processors to squeeze out some suppliers in favour of others.”

Mr Connon concluded that dairy remains largely an unsupported sector, with no grant schemes in Scotland supporting investment, resulting in all improvements to meet market demand coming from private investment.

This announcement from Lactalis follows a similar decision in August by Tesco, to reduce the number of producers in its Sustainable Dairy Group.

The milk supply and sustainability director for Lactalis UK and Ireland, Matt Friel, told Farmers Weekly that its review considered a range of factors including factory requirements, geographic location, milk quality, annual volume and supply profile, and farm assurance standards.

“The outcome of this review is that we have taken the decision to serve notice on 12 farms supplying our creamery in Stranraer,” said Mr Friel. 

“We have been in direct contact with impacted farmers and are working closely with our farmer representatives to manage this change. 

“We will continue to work with, and support, our supplying farms over their 12-month notice period and remain fully committed to collecting milk and fulfilling our supporting obligations.”