Müller purchase to affect a “significant number of dairy farmers”

Major milk processor Müller has reached an agreement to acquire Yew Tree Dairy, which currently has around 100 Scottish dairy farming suppliers.

milk being poured into glass

The acquisition has been described by NFU Scotland as a major rationalisation within the dairy sector, which will affect a significant number of Scottish dairy farmers.

In the hour prior to releasing its statement, NFUS had already been contacted by five Yew Tree suppliers.

NFUS Milk Committee chair Bruce Mackie said:

“Any contraction in the number of available milk purchasers is clearly a concern as competition for milk, particularly in more remote milk fields, is an important factor in not only securing a fair price but maintaining dairy production in all parts of Scotland.”

Affected producers will be issued with new contracts. These will be among the first to be issued under the new statutory arrangements for milk contracts, which come into force across the UK in July.

Significant investment

Yew Tree Dairy, which is based in in Skelmersdale, West Lancashire, is a family-owned dairy company producing fresh milk and cream. 

Following significant investment in recent years, the business now also specialises in milk powder production.

READ MORE: World Milk Day 2024: Why dairy products are so important

Completion of the deal is expected later this year subject to approval from the Competition and Markets Authority. 

Once the deal is completed, Müller said it plans to “significantly invest” in the capacity and capabilities of the Skelmersdale milk drying site. 

The business will enhance its milk drying capability, enabling it to become a “major producer and exporter of powdered milk products made in Britain, with milk from British dairy farms”.

“Time was right”

Carl Woodcock from Yew Tree Dairy said in a statement: “We as a family are very proud of the dairy business we have built and are looking forward to seeing the progression and development by Müller of the Skelmersdale operation.

“The family felt the time was right to explore new opportunities whilst retaining our farming roots.”

He thanked the dairy business’s staff, farmers and customers, and added:

“After meeting with the Müller family, we feel confident that this is the right decision for the business to be part of a larger organisation for the next phase of growth that will benefit our staff, farmers, and customers in the longer term.

“The key for us was to find a buyer that not only shared our values but had an exciting vision for the future of the great British dairy industry. 

“Following a competitive process, Müller was our clear preference, and we leave our business in really good hands.”

Export opportunities

Rob Hutchison, CEO at Müller Milk & Ingredients commented:

“Yew Tree Dairy has excellent processing capabilities, a talented team with great expertise, and strong relationships with its customers and supplying farms. 

“When combined with our well-invested and resilient network, I am very confident that these two family-owned businesses will complement each other really well. […]

“This acquisition will enable us to tap into global dairy consumption growth, unlock additional export opportunities and continue to drive supply chain resilience.”

Seeking clarification

NFUS Milk Committee is due to meet Müller in the next few days to seek clarification on contractual and collection arrangements, as well as timescales.

The committee will also ask about Müller’s planned investment in the Yew Tree site and whether it will bring opportunities for Scottish milk.

“On behalf of affected milk producers, we will be looking to the companies to quickly set up support helplines and producer meetings to answer the many questions that affected dairy farmers will have.  

READ MORE: New milk contract regulations come into force later this year

“A sudden change in milk purchaser and contractual arrangements is always a time of worry,” Mr Mackie said. 

“Many will also point to Müller’s decision to walk away from Aberdeenshire in 2019 and we will be seeking cast iron reassurances on its commitment to producers in that area who are now supplying Yew Tree.

“If NFU Scotland or the Scottish Dairy Hub can assist any affected producers, then we urge them to get in touch.”  

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