First Milk to sell two Scottish creameries

Shelagh Hancock, CEO of First Milk, said, “Following a strategic review, we have determined that our branded consumer-facing businesses in Campbeltown and on Arran are not a strategic fit for First Milk moving forward. ​

“The review identified that there is undoubtedly a market for the premium Mull of Kintyre and Isle of Arran brands but capturing the opportunities would require significant investment for activity that is not core to our strategic direction. ​

“However, we are confident that with the right focus and investment under new ownership the businesses would prosper.”​

Hancock said selling the creameries will enable First Milk to continue its focus on developing its Haverfordwest and Lake District creameries.

“Campbeltown and Arran Creameries will continue to run as normal during this sale process and we will be working closely with prospective buyers to ensure a smooth transition. We appreciate that this decision will affect some of our colleagues, but we hope that under new ownership the sites will thrive, offering good employment prospects for the future.”​

First Milk told DairyReporter it believes there is a real opportunity here for the right owner, "and we are committed to finding a buyer. There is undoubtedly a market for the premium Mull of Kintyre and Isle of Arran brands. We don’t have a firm timescale in place - our focus is on seeking a buyer who will invest and provide the right focus, ultimately securing a positive future for the business.​

"We are open to discussions with potential purchasers about the scope of a potential sale, but our focus is on seeing the sites continue as a going concern.​

"This announcement does not affect the members supplying these sites and their contracts remain the same. Milk supply would be an integral part of a sale arrangement. How this would be facilitated would depend on the circumstances and requirements at that time."​​

NFU says producers ‘shell shocked’

In a statement sent to DairyReporter, NFU Scotland milk committee chairman, John Smith, who supplies milk to the Campbeltown creamery said, “While producers supplying these creameries are shell-shocked at the announcement, the most important thing to keep in mind is that, in Mull of Kintyre and Arran cheddar, both creameries are making world-famous; award-winning high quality cheese and both sites should be hugely attractive to potential buyers.​

“In the short term however, farmers supplying these creameries will be frustrated, justifiably worried but not completely surprised by the announcement. They have built their businesses with a view to continuing to milk cows and have stuck with First Milk through thick and thin.  However, these are local, family farms who have also successfully invested in building and promoting their brand locally and nationally and we must now look to the future.​

Smith said there are no other milk buyers currently operating in what are remote milk fields, but they are very productive, producing high quality grass-fed milk so the focus is now firmly on building a plan and attracting potential buyers into the area to view the plants. 

“For a relatively small investment, potential buyers or partners have an opportunity to take the Kintyre and Arran brands into higher value specialist markets backed by a story with real provenance and great tasting cheese,”​ Smith said.

Potential for growth

NFU Scotland also spoke to Paul Grant, chair of the Scottish Dairy Growth Board. 

Grant said Kintyre is a brand that can generate great interest and has a great story to tell. 

“That has been very successful in markets like North America but there is a huge opportunity to broaden the range based on what people round the world want from products associated with Scotland.  The huge appetite for whisky or smoked salmon can translate to new markets for whisky-flavored or smoked cheeses,”​ Grant added.

“There is a real opportunity here for someone to tap into a market with potential to grow.  The model at Orkney creamery is working well and we would be keen to support any potential buyer for Campbeltown or Arran based on the experience and knowledge the Dairy Growth Board has built up over the last three years.”​