Müller announces £15m investment and potential dairy closures
And although Müller’s network of distribution depots in Scotland is not under review, some roles at Aberdeen depot will also fall under consultation.
A total of 229 jobs could be lost at the Aberdeen and East Kilbride sites.
Farmers that supply the Aberdeen dairy with milk can continue to supply Müller, but will pay a transport charge for their milk.
The announcement comes a day after Müller announced a reduction of its standard milk price by 0.85 pence (1.2 cents) per liter from May 1, blaming “the continuing extreme market volatility coupled with high levels of global milk supply.”
Müller will consult before deciding
The company said it will consult employees and their representatives at the Aberdeen and East Kilbride sites, stressing that no decisions will be taken until the 45-day consultation period is complete and the business has had the opportunity to review its findings.
Müller says both dairies are operating well below full utilization with more than 60% of the capacity at the Aberdeen dairy unused.
Andrew McInnes, managing director of Müller, said the dairy in East Kilbride makes products including flavored milk and potted cream, and moving production to Bellshill would be more efficient.
“It is important to stress that the status quo is just not viable in the medium term. Our Scottish dairies are inefficient and costly, which is putting a brake on the innovation and investment needed to stimulate new demand for dairy products,” McInnes said.
“We will enter the consultation with an open mind and will rigorously assess the situation and listen to our colleagues before arriving at a decision.”
Farmers can keep supplying – at a cost
If the Aberdeen dairy closes, the 43 farmers supplying the site will be offered the opportunity to continue supplying Müller, as long as they agree to a 1.75 pence (2.5 cents) per liter transport charge, which Müller says reflects the need to take the milk to Bellshill.
Farmers who don’t wish to continue will avoid the transport charge but their contracts will terminate on expiry of 12 months’ notice.
McInnes said the investment in Bellshill was, “to reinvigorate our fresh milk and ingredients business in Scotland,” which would make Bellshill a centre of excellence for dairy, benefitting consumers, customers, employees and farmers.
NFU Scotland’s North East Chairman, and Müller supplier, Roddy Catto from Hillhead of Muirton Farm, Whitecairns, said, “The 43 dairy farmers supplying the Muller site at Aberdeen, which includes myself, have a lot to think about ahead of a meeting with the company, scheduled to take place at Thainstone on Friday morning (1 April).
“We need to hear more about the investment plans at Bellshill, what that might mean to the Müller business and balance that against any additional transport costs we would face as Muller suppliers were the Aberdeen site to be wound down.
“The meeting with Müller must leave all dairy farmers in the area with a clearer view on what these proposals will mean, so that farmers can take an informed decision now on their future in milk production.”