Scots co-op’s deal with film giant takes sting out of payout pain

THE Scottish dairy firm behind cheese brands including Scottish Pride, Isle of Arran and Mull of Kintyre paid out £741,000 last year as part of the closure of its Isle of Bute creamery.

Scottish Milk Products (SMP) – part of Paisley-based First Milk Group, the UK’s largest farmer-owned co-operative – shut the Rothesay site with the loss of 19 jobs after a lack of milk meant it wasn’t being used at capacity.

The one-off costs, which also included fees relating to the proposed redevelopment of its Campbeltown creamery, came on top of a similar-sized payout in 2009.

Accounts filed at Companies House show turnover fell to £10.7 million in the year to 31 March from £30.3m in the previous 12 months.

All of SMP’s cheese is sold to its parent group, which also owns the Lake District and Pembrokeshire cheese companies.

SMP’s 2010 revenues had included an extra £14m of stock sold to First Milk to help with management of reserves.

Despite the one-off expenses, the diary operator managed to cut its pre-tax losses to £1.1m from £1.5m. The firm’s headcount dropped to 34 from 53, with the associated staffing costs falling to £792,000 from £1.2m.

In July, First Milk – which produces about 15 per cent of the UK’s milk – posted a massive jump in profits to £7.2m from £360,000 after cutting costs.

The group was boosted by a deal with film studio Dreamworks to promote its Kung Fu Panda 2 movie on packets of Cheddar Stix cheese snacks.