Wiseman move underlies dairy debate

Without referring directly to the takeover, Jim Paice, the UK farming minister, said that milk producers had a tremendous opportunity to expand into areas where more value could be given to their milk

Referring to the current trade deficit in the UK, more than £1.3 billion annually, in milk products, he stated bluntly, “There is the opportunity to replace imports with home-produced products.”

He accepted that, because of poor farm gate prices paid to producers in recent years, the UK was not currently filling its milk quota. He believed that the recent deal for milk hammered out in Brussels that encourages producer organisations would help protect the primary producer from downward price pressure.

But he emphasised he did not want to see compulsory contracts between producers and processors as this would only burden the whole industry with more paperwork

With the current favourable exchange rate putting pressure on imports, this was the time UK milk producers could finally get out of the mindset produced by more than half a century where milk boards were the sole purchaser of milk in this country, he said.

That monopoly had prevented innovation taking place while other countries had been far more focused on changes in consumer demands and expectations.

Kate Allum, chief executive of First Milk, the largest farmer owned milk buyer co-operative in the UK, echoed that message saying that there had to be a change to the current perception that milk produced in this country was mainly for the fresh market, or for butter and cheese production. With a 60 million population in the UK, that still provided a big market but future growth would take place in doing something with milk to make it more attractive.

The significance of the Müller takeover of a fresh market processor combined with their reputation in more lucrative markets such as yoghurt and milk-based health products was not lost on the delegates even although the company has made no statement on their future intentions

Commenting on the takeover, NFU Scotland’s milk policy manager George Jamieson said the potential synergies between the two companies were clear.

“Müller is a very successful multinational dairy company making value-added products and Wisemans is a leading UK liquid milk processor. The similarities between the two companies are also apparent – both have their roots in family-run businesses that have invested successfully in modern plant.

“Several hundred Scottish dairy farmers supply milk direct to Wisemans every day with many of those on a supermarket contract. In addition, the Scottish-based co-op First Milk – as well as having a significant stake in Wisemans – also supplies it with much of it additional milk requirements. That means the Müller bid has significant implications for the Scottish dairy sector.”