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Pressure on Sainsbury's as M&S pays farmers following Tomlinsons collapse

Dairy farmers owed tens of thousands of pounds following the collapse of Tomlinsons Dairies are hopeful they can recoup some of the money after Marks and Spencer paid producers for milk it had received.

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While only a small number of farmers supplied M&S via the Wrexham-based processor, which fell into administration last week, those speaking to Farmers Guardian said it helped set a precedent.

 

They are now urging Sainsbury’s to pay missing milk cheques for 40 farmers who were on aligned contracts as part of the supermarket’s Dairy Development Group. Some are owed six weeks’ worth of payments.

 

Farmers Guardian understands these producers – the majority of which are in Cheshire and a handful in South Wales – have now moved to Muller contracts.

 

Solid

 

One affected farmer told FG: “We are relieved to be back with a solid business.”

 

Many of the producers had originally supplied Muller but were signed to Tomlinsons in 2016 as part of a move by Sainsbury’s to diversify its milk supply base.

 

Tomlinsons and Medina both won new contracts alongside Muller and Arla.

 

However, shortly afterwards, producers cited concerns about the financial stability of Tomlinsons.

 

Last week administrators PWC were appointed, with all staff being made redundant.

 

A PWC spokesperson said: “Despite some improvement in its trading performance of late, Tomlinsons had suffered an accumulation of significant operating losses over recent years which were exacerbated by industry wide issues such as energy costs and a depressed cream price.”


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Dairy analyst Chris Walkland said questions needed to be asked over Sainsbury’s tendering process.

 

He said: “I am still hearing that Sainsbury’s farmers will not be paid, which begs the question as to whether legal action by Sainsbury’s farmers will be on the cards to get their money, given they were effectively forced to move by Sainsbury’s in the first place.

 

“If they do not get paid then Sainsbury’s can kiss goodbye to the reputation of the Sainsbury’s Dairy Development Group and Sainsbury’s as working closely with and caring for suppliers.”

The future is even less certain for 35 non-aligned producers in North Wales, who supplied to various roundsmen and stores via Tomlinsons.

 

However, it is believed the Welsh Government has been in talks with PWC and affected farmers hope they will be able to recover some of the money owed.

 

Sainsbury’s said while it did not comment on its relationships with individual suppliers, it had been working with Tomlinsons farmers and had prioritised the continuation of milk collections by switching to Muller.

 

An M&S spokesperson said: "Our relationships with our farmers are central to our Select Farms programme and this October, we are celebrating 20 years of our Milk Pledge, which is our promise to farmers that we will always pay a fair, leading and transparent price for milk.

 

"We are directly supporting the two farmers that have produced M&S Select Farm milk through Tomlinsons Dairies and we have paid them for the milk they have supplied to us.”

Meanwhile farming charity RABI has stepped in to offer grants worth £3,000 as part of its Crisis Fund.

 

The charity said affected farmers should contact its helpline which will help fast-track applications for financial assistance using a ‘simplified application and criteria process’.

 

RABI chairman Malcolm Thomas said: “RABI exists to support members of the farming community, which is why we are putting these measures in place at this difficult time.

 

“It is a proactive move on our part to make immediate, short-term support readily available.

 

“The news that Tomlinsons has gone into administration came out of the blue for many farmers, leaving some without payments for milk supplies and having to find alternative milk processors to supply to.”

 

Affected farmers have been urged to call RABI’s Freephone helpline number on 0808 281 9490.

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