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Müller confirms measures to address growing milk surplus in Scotland

Press release   •   Oct 31, 2019 14:53 GMT

An unprecedented 25% surge in Scottish farm milk production which is substantially in excess of local demand for fresh milk from consumers, is to be addressed by Müller Milk & Ingredients.

Following a month long review, the company will introduce measures to tackle the problem, which has seen Müller’s 230 Scottish dairy farmer suppliers cumulatively increase production since 2014 by the equivalent of 33 litres of additional milk per annum for every person in Scotland.

Surplus milk is currently being transported by Müller to England where markets can be found for it, resulting in more than 6,000 tanker movements travelling a total of 2.5 million miles each year.

Measures to be introduced by Müller include a reduction in the overall volume of milk purchased in Scotland. Regrettably this will be achieved by serving a full year’s notice on a number of dairy farm suppliers in the North East of Scotland.

Müller will also introduce a tiered transport charge for dairy farmer suppliers in Scotland from February 2020 with the fastest expanding dairy farmers shouldering a proportionately higher charge than those who have grown production more modestly.

Rob Hutchison, Milk Supply Director for Müller Milk & Ingredients said:

“We fully appreciate that these measures will be extremely unwelcome and destabilising for our farmer suppliers particularly in the North East of Scotland, but the current situation is unviable and we must act.

“We completed the largest single investment in fresh milk processing in Scotland in more than a decade at our dairy in Bellshill last year and we will continue to do what we can to stimulate new demand for fresh milk.

“But with fresh milk already in 96% of the nation’s fridges and overall consumer demand for the product in marginal decline, the reality is that it is extremely unlikely that this sector will soak up the heightened levels of milk production from farms which we have seen.

“Our farm services team will now work closely with affected dairy farmers and we will do everything in our power to help them adjust to the changes which we must now make.”

During the review period, Müller sought views and input from the Müller Milk Group farmer board elected to represent dairy farmers, National Farmers Union Scotland and Scottish Government.

Ends…31 October, 2019

Issued by Graeme Jack, Communications Director, Müller UK & Ireland Tel 01355 598585 or 07900 430269.

Note to Editors

  1. Serving Notice -Müller will exercise its contractual right to serve 12 months notice to 14 dairy farmers in the Aberdeenshire area, North of Aberdeen. These dairy farmers are located in areas which present heightened or complex logistical transport challenges for Müller. Should dairy farmers who are affected find an alternative buyer in advance of the end of their notice period, the company will support an earlier move. Affected dairy farmers have been contacted directly by the Müller farm services team.
  2. Transport Charge for Surplus Volumes - Dairy farms who supply Müller in Scotland which have increased production to the greatest extent will shoulder a higher cost than those who have not:
  • Greater than 15% expansion – 0.85ppl on all litres produced
  • Above 5% to 15% expansion – 0.55ppl on all litres
  • Up to 5% expansion – 0.25ppl on all litres
  • Base year for calculation – 2019 v 2017 actual 12 months production
  • The charge will apply across all farms and groups except Aberdeenshire farms who already pay a transport charge
  • Charge rates will be reviewed annually with changes in customer demand and farm supply volumes reflected in the review

Müller UK & Ireland is wholly owned by Unternehmensgruppe Theo Müller which employs 24,000 people throughout Europe. In the UK, Müller develops, manufactures and markets a wide range of branded and private label dairy products made with milk from more than 1,600 British farmers.

The Müller brand is ranked at No.9 in The Grocer’s Top 100 list of Britain’s Biggest Brands, and is also the 8th most chosen brand in the UK, picked from shelves more than 217 million times each year. Müller UK & Ireland comprises three business units:

Müller Milk & Ingredients is Britain’s largest producer of branded and private label fresh milk, cream, butter and ingredients products, with a network of dairies and depots servicing customers throughout the country.

Müller Yogurt & Desserts is the UK’s leading yogurt manufacturer responsible for major brands like Müllerlight, Müller Corner and Müller Rice. It produces chilled desserts under licence from Mondelez International and supplies the UK private label yogurt market from a dedicated, state of the art yogurt facility.

Milk & More delivers daily essentials to more than 500,000 homes in England, via a network of 53 local fulfilment centres. The milkman is arguably the original home delivery service and Milk & More is ensuring that this great British tradition continues to flourish.

Müller is an Official Supporter of British Athletics and Athletics Ireland. With branding and activation rights for five events in 2019, Müller aims to empower consumers to make active and healthy lifestyle choices.

For further information, see Müller Now, our first ever industry report.