The future of dairy farming in north-east Scotland has been put on the line with the announcement that milk buyer Muller is planning to close its Aberdeen processing plant.
The 43 dairy farmers who supply the plant have been told they can continue to supply the German-owned business, but only if they pay a charge of 1.75p/litre to have their milk transported to the company’s plant at Bellshill.
There will be a 45-day statutory consultation to examine the potential winding down of milk processing in Aberdeen followed by a “period of consideration” by the company.
Technically the Aberdeen plant could shut its doors within two months, but a spokesman said the process of closing the plant would “take time but would be substantially less than a year”.
Farmers were to meet company representatives in Aberdeenshire this morning to discuss the news which has come as a shock to the area’s producers.
It is understood that Muller suppliers south of Brechin and in Perthshire and Fife will not be affected by the firm’s plans which include investing £15 million in their Bellshill plant.
NFU Scotland’s north east chairman, Roddy Catto, who is a Muller supplier, said farmers “had a lot to think about” ahead of today’s meeting.
“We need to hear more about the investment plans at Bellshill, what that might mean to the Muller business and balance that against any additional transport costs we would face as Muller suppliers were the Aberdeen site to be wound down,” he said.
“The meeting with Muller must leave all dairy farmers in the area with a clearer view on what these proposals will mean, so that farmers can take an informed decision now on their future in milk production.”
A Muller supplier in Angus, who did not want to be named, said he had been “summoned” to the Aberdeenshire meeting by text with less than 24 hours’ notice.
He predicted the closure of the Aberdeen plant would end milk production on many farms.
“In my case a charge of 1.75p/litre would mean £3,000 a month off my milk cheque,” he said. “I can see a lot of us going out of business.”
In a statement, the company said the contracts of farmers in the area who choose not to continue supplying Muller, would terminate on expiry of 12 months’ notice, to “give them time” to make alternative arrangements for their milk production.
A total of 229 jobs are affected in Aberdeen and at another plant in East Kilbride which is also threatened with closure.
Muller milk and ingredients managing director Andrew McInnes said the status quo was “not viable in the medium term”.
“Our Scottish dairies are inefficient and costly which is putting a brake on the innovation and investment needed to stimulate new demand for dairy products,” he said.
“Our Aberdeen dairy is operating at less than 40% of its capacity and milk production from farmers in the north east is far in excess of customer requirements in the area.
“We will enter the consultation with an open mind and will rigorously assess the situation and listen to our colleagues before arriving at a decision.”