Business news: Freshways contract change prompts dairy supplier anger

According to independent dairy analyst Ian Potter Associates’ news bulletin, Freshways is citing the inclusion of Arla’s current 29.06ppl standard litre price in its basket of five, as the reason it has become necessary to make the contract change in order to remain competitive. The other four were averaging 26.6ppl.

The firm, owned by the Nijjar family, which says it is the UK’s largest independent processing dairy, has given producers five weeks’ notice of what will be a significant price drop when it reverts to a schedule price.

Mr Potter said it was a long time since so many farmers had vented their anger with some claiming their farmer representatives had not been consulted on the move and that the change had simply been imposed.

NFU dairy board chairman Michael Oakes said he too believed the change was being steamrollered through and that the lack of consultation and explanation, other than the letter, was what was particularly galling many producers.

He said his impression, having spent time recently with European and global commodity traders, was that most markets looked relatively stable going forward, but reiterated the weak position of the UK liquid market.

Mr Oakes said he believed Freshways had some 180 suppliers, but was not convinced that all were on the same contract. He acknowledged no-one really knew the financial position of the company.