The company announced that up to 180 jobs will be created as it invests £60m ($74.5m) to upgrade capabilities and operational efficiencies at Severnside and Foston with enhancements to dairies at Droitwich, Manchester and Bridgwater.
However, the company says it plans to wind down 389 permanent employees at its Chadwell Heath dairy in London over the next 18 months.
The Unite union called it a 'major blow', and blamed the closure on the lack of investment by the previous owners, Dairy Crest, which meant the cost of processing the milk at the plant was too high.
MMI says it will begin a 45-day consultation period from November 10, 2016 and will work with affected employees and their representatives to look at all options including offering alternative roles within the business.
If Chadwell Heath closes, Müller says it will work with dairy farmers who supply the site to review their options.
The action follows Müller’s acquisition of Dairy Crest’s dairy operations, including Chadwell Heath dairy, in December 2015.
Not economically viable
Andrew McInnes, managing director of Müller Milk & Ingredients, said that when Dairy Crest’s fresh milk dairy and distribution operations were acquired, the company made it clear that changes would be needed.
He added that it was clear the Chadwell Heath dairy is not economically viable.
He said that the site requires complete overhaul and modernization and Müller cannot justify the amount of investment that would be needed.
NFU dairy board chairman Michael Oakes told DairyReporter that the announcement of further investment from Müller in the UK is a positive sign for the future for their suppliers.
“However, we also recognize the uncertainty for staff at Chadwell Heath. Müller have assured us that following the consultation, they will work with dairy farmers supplying Chadwell Heath to ensure that they are not disadvantaged. Any dairy farmers that are concerned should ring Müller directly,” Oakes said.
Unite, however, is demanding to see the financial figures to justify the loss of 389 jobs at Muller’s milk plant at Chadwell Heath in east London
Unite national officer for road transport, commercial logistics & retail distribution Matt Draper said that the hardworking workforce has had a double kick in the teeth.
"They took a 10% pay cut when the site was owned by Dairy Crest to keep the operation going, but despite this, the new owners are now closing the plant," Draper said.
“We will be exploring with the management every possibility to keep the plant going.
“But we have to acknowledge the unrelenting pressure that supermarkets are exerting on milk producers to drive down prices to often uneconomic levels – what has happened at Chadwell Heath is a symptom of this unpleasant phenomenon."
Draper called it a devastating blow for the workers and their families as well as to local economy.
He said that in addition to the 389 jobs potentially lost at Müller, another 30 to 40 are at risk at the Nampack bottling plant that shares the site.