Suppliers of Yew Tree Dairy were told this week that the family-owned Lancashire company has been acquired by major milk processor Muller.
Yew Tree Dairy has 100 Scottish suppliers – three of which are situated north of Aberdeen, with a fourth supplier in the area having just recently signed a contract with them.
The processor produces fresh milk and cream, as well as specialising in milk powder production.
Completion of the deal is expected later this year subject to approval from the Competitions and Markets Authority.
Deal to be approved by Competitions and Markets Authority
NFU Scotland’s milk committee chair and Aberdeenshire dairy farmer Bruce Mackie said the acquisition was a “major rationalisation” within the dairy sector and will affect a significant number of dairy farmers across Scotland.
Mr Mackie said in the first few hours after the announcement, five Yew Tree suppliers were already in contact with the union.
“A sudden change in milk purchaser and contractual arrangements is always a time of worry,” said Mr Mackie.
“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.”
He also referred to Muller’s decision in 2019 to serve termination notices to several suppliers located north and west of Aberdeen following a review of its dairy operations in the country.
The company said the area presented “heightened or complex logistical challenges”.
“We will be seeking cast iron reassurances on its commitment to those who are now supplying Yew Tree,” he said.
Fairness for Aberdeenshire suppliers needed given ‘past history’
“Given the past history, I would like to hope these suppliers will be treated very fairly and will be given the same transport charge as everywhere in the country.”
Mr Mackie said members of the NFUS milk committee are scheduled to meet Muller next Tuesday (June 11).
“What we do know is that affected producers will be issued with new contracts and that these will be amongst the first to be issued under the new statutory arrangements for milk contracts, recently agreed by Parliament and which come into force across the UK in July,” he added.
Mr Mackie says the union will be looking to the companies to quickly set up support helplines and producer meetings for affected dairy farmers.
One Yew Tree Dairy supplier said Muller was currently paying around 5p per litre more than Yew Tree, which would be bring in £45,000 more per year to his business.
Muller could pay around 5p per litre more to current Yew Tree suppliers
He said Yew Tree were renowned for issuing contracts to new starts to get more people into the industry and they played an important role in brokering milk products to different parties.
Once the deal is completed, Muller plans to significantly invest in the capacity and capabilities of the Skelmersdale milk drying site to enable it to become a major producer and exporter of powdered milk products.
Carl Woodcock of Yew Tree Dairy said the family felt the time was right to explore new opportunities whilst retaining its farming roots.
‘Right time to explore new opportunities’ says Yew Tree chief
“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.
“Following a competitive process, Müller was our clear preference, and we leave our business in really good hands.”