Processors work to mitigate losses from Lloyd Fraser fallout

The dairy supply chain has been working to recommence milk collections on farm and minimise losses after haulage company Lloyd Fraser was placed into administration last Friday (22 September).

Many dairy farmers did not have their milk collected on Friday and had to pour away full tanks on farm.

A spokesperson for Lloyd Fraser told Farmers Weekly that only 35% of the 3m litres of milk were estimated to have been collected on Friday.

See also: Milk haulier Lloyd Fraser falls into administration

Processors including Arla, Muller and Meadow Feeds had used Lloyd Fraser as a haulier. They have since been working to ensure milk collections have restarted, either by other contractors or by the dairies themselves.

An Arla spokesperson said: “Over the weekend, milk that was scheduled for collection from our farmer owners took place and we expect to continue to run as normal throughout the course of the week.

“We can confirm that we have taken on drivers that were employed at Lloyd Fraser as Arla employees and we are working through this process now.”

A spokesperson for Muller said: “Our logistics team worked hard to minimise the impact for our supplying farmers, ensuring all in-bound logistics for impacted farms were collected by Muller, or via a third-party.

“Since Friday we have completed all collections from affected farms.”

Meadow Foods has also been contacted by Farmers Weekly for an update on current milk collections for its producers but declined to comment.

Legal dispute

Meanwhile, Barbican Capital, the parent company of Lloyd Fraser, has sought legal advice against its bank, Close Brothers Ltd, and is contesting the decision that put it into administration.

A spokesperson for Barbican Capital said: “Barbican Capital, the owner of the Lloyds Fraser group of companies, is appalled by the actions of Close Brothers Ltd and Close Invoice Finance Ltd which, we believe, has led to our group of companies being incorrectly placed into administration and unnecessarily losing related licenses required to meet our customers’ needs.

“This goes way beyond the closure of a bank account. This is ‘debanking’ on a terrifying scale, which will have an impact on hundreds of employees, the UK’s hard-working milk farmers and the nation’s industry.”

Insurance

Typically, the value of uncollected milk is reimbursed by the processor or haulier if they are at fault.

A spokesperson for Lloyd Fraser said: “Farmers will have to claim on their own insurance and, although the dairies usually compensate directly for any discarded milk, this may also be an issue for the claim we will be making during our legal challenge.”