Dairy Farmers of Britain succumbs to price pressures

By Neil Merrett

- Last updated on GMT

Related tags: Supply chain, Supply chain management

A UK cooperative representing 10 per cent of the country’s supply chain has fallen victim to wider uncertainty gripping the European market after going into receivership this week.

Dairy Farmers of Britain (DFOB), which employs 2,200 people, says that it has entered receivership after no longer being able to cover its production costs.

The news reflects wider turmoil being felt across the European and global milk sector amidst market deregulation that has led to protests across the bloc from suppliers claiming they need more support measures to survive.

PricewaterhouseCoopers, which will act as receiver for the cooperative, is reportedly looking for buyers for DFOB’s cheese and milk businesses as well as to safeguard its milk supply.

Lord Grantchester, chair of the DFOB board, says that despite numerous restructure attempts to ensure profitability, the cooperative had no alternative but to enter into administration.

"What is most important now is that the supply chain is maintained through to our consumers, that jobs are saved, and that there is a home for our members’ milk,”​ he states. “We will do whatever is appropriate to assist the receivers in achieving this outcome.”

Retailer support

The cooperative’s decision comes as farmer groups across the bloc step up calls for further support from retailers to ensure more viable milk supply for the industry.

Back in February, Sieta van Keimpema, vice president of the European Milk Board (EMB), claimed farmers and processors were being short changed by major supermarket groups that have continued to profit at the same time suppliers struggle to cover costs.

Little since seems to have changed from the EMB’s perspective, after the lobby group last week suggested that ongoing market deregulation in the block is distorting the supply chain in favour of retailers.

"In this way the EU-Council has given them [retailers] even more power and once more shifted the balance to the detriment of the farmers,“​ stated EMB president Romuald Schabe.

Related topics: Manufacturers, Pricing Pressures

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