Capital changes have also been announced to ‘drive growth and prosperity’
First Milk has announced a new member premium and capital changes to ‘drive growth and prosperity’ for its members.
The cooperative will introduce a member premium in the form of a 13th payment to members from April 2019, paid annually to members.
This payment will be 0.25ppl to someone fully invested in the business, with the payment being pro-rata adjusted based on achievement of the members’ capital target.
It has also announced members’ capital targets will be fixed with immediate effect, based on current milk production levels as calculated in March 2018.
It said this would enable members to grow and expand their milk production without a requirement to contribute additional capital. Member capital contributions will continue for those that have not yet reached their capital target.
It will also introduce an independent share trading platform, to make share trading easier and the value of member shares more transparent.
First Milk said the developments were in response to member feedback and had the full support of the Board and Member Council.
Chief executive Shelagh Hancock said she was delighted First Milk now had the financial security to make these changes.
“These developments have been agreed in direct response to member feedback and have the full support of the Board and Member Council.
“In combination, these changes will recognise the loyalty of our long-standing members, remove some existing barriers to expansion on farm, and provide a simple and transparent way for members and retired members to trade shares.
“As we look to the future, these changes will help us deliver our growth strategy, which sees us investing significant capital into our sites to ensure we can meet the growing demand from our customers for our high-quality milk and cheese.
“By working together to deliver our growth plans I am confident that we will deliver prosperity for our members.”
NFU Scotland Milk Chairman, John Smith, said said he was very pleased with the introduction of a member premium.
"It is important that members are rewarded for their hard work and loyalty, which is exactly what this announcement will provide. Despite the difficulties over the last few years, it is encouraging to see First Milk become more transparent and open with their members.”
He added it was positive to see the co-operative seeking additional volumes and facilitating expansion without the increasing of capital targets which were seen as a barrier.
“Following on from First Milk’s decision to divest its speciality cheese businesses on Arran and Mull of Kintyre, those members in particular will be hoping that these changes will bring a positive outcome for them in the future, having been loyal members of First Milk for many years now.”