It stinks. It’s full of holes. But it will give you a tasty lump sum. The company that’s put cheese in its pension plan

 

Twenty million kilograms of cheddar is a lot of cheese – enough to make roughly 200 million slices of cheese on toast, for one.

Yet for former milkmen and other retired workers at one of the UK’s biggest food companies, it will form a crucial part of their livelihood for the rest of their days.

Dairy Crest, the maker of Cathedral City, announced it was backing its pension fund with £60m-worth of maturing cheese.

The dairy goods maker – whose brands also include Utterly Butterly and Clover – is using the cheddar as one of a number of measures to tackle its pension deficit, which as of September stood at £84m.

The cheese is being pledged to the trustees of the fund who will, in the highly unlikely event of the fund going bust, be able to turn the cheddar into, well, cheddar by selling it.

Dairy Crest has £150m-worth of cheese maturing at any one time in its massive temperature controlled warehouse in Nuneaton, Warwickshire. The cheddar is moved there after being produced in Davidstow, Cornwall, and matures for an average of 12 months before being cut, packaged and sent out for sale.

Pension deficits in the dairy industry have been exacerbated by the fact companies are responsible for now-retired milkmen.

In 2011 milk group Uniq – formerly known as Unigate – handed 90 per cent of its shares to its pension scheme.

Dairy Crest is not the first company to turn to their own wares to back up their deficit.

“What we are seeing now is companies and trustees getting more and more creative with the assets they are using,” said pensions expert Ros Altman, who warned it is getting “harder and harder” for money to be found to shore up pension schemes.

Diageo, the drinks giant and maker of Guinness, announced in 2010 it would use millions of barrels of maturing whisky in an attempt to plug its pension deficit.

The whisky – made up of barrels from its distilleries in Scotland – is part of a 15-year deal that gives the company the option to buy it back from the fund after it has aged for three years. At the end of the 15-year period, the whisky can then be sold back to Diageo.

Other companies have used property to the same effect, such as Premier Inn-owner Whitbread, which has created a portfolio of properties occupied by the hotels chain.

“Pension schemes need money but if an employer is short of cash then it makes sense to give the scheme a claim over a physical asset instead,” said Tom McPhail, head of pensions research at financial services company Hargreaves Lansdown.

However, anyone hoping their block of cheese at the back of the fridge will, if left alone, turn into a tasty nest-egg will be disappointed to hear that the cheddar being pledged will not continue to gain in value as it gets older. Instead, the cheese allocated will be constantly revolving as it reaches its peak and is replaced by new stock.

Mature investment: Top cheeses

Cheddar

If you pick a good one, Britain’s favourite cheese, pictured above, gains complexity when carefully stored. Regarded by many as our top cheddar, Montgomery’s from North Cadbury, Somerset, is aged for a minimum of 12 months.

Parmigiano Reggiano

As everyone knows, Samuel Pepys buried his prized Parmesan before fleeing the Great Fire of London. Maturing is vital – usually two to three years – though producers of the world’s most famous hard cheese prefer more controlled conditions.

Mimolette

The Keith Richards of the cheese world, this speciality of Flanders appears amazingly gnarled and cracked in French supermarkets, But like the veteran Rolling Stone, it outshines younger rivals. Aged Mimolette is the perfect accompaniment for fine wine.

Emmentaler

This mighty Swiss giant becomes strong and nutty as it ages for 18 months or more. There’s one drawback if you choose to invest in a whole Emmentaler. Weighing 100 kilos per round, it is the largest cheese in the world.

Compté

Make in Eastern France, the large flat discs made from unpasteurised milk command high prices but are worth it for deep, spicy flavours. Most are aged from 12-18 months. 

Christopher Hirst

Independent Partners: 10 top tips for retirement. Get your free guide here

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Software Developer / C# Developer

    £40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

    Neil Pavier: Management Accountant

    £45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

    Sheridan Maine: Commercial Accountant

    £45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

    Laura Norton: Project Accountant

    £50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

    Day In a Page

    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf
    From Shakespeare to Rising Damp... to Vicious

    Frances de la Tour's 50-year triumph

    'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
    'That Whitsun, I was late getting away...'

    Ian McMillan on the Whitsun Weddings

    This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
    Kathryn Williams explores the works and influences of Sylvia Plath in a new light

    Songs from the bell jar

    Kathryn Williams explores the works and influences of Sylvia Plath
    How one man's day in high heels showed him that Cannes must change its 'no flats' policy

    One man's day in high heels

    ...showed him that Cannes must change its 'flats' policy
    Is a quiet crusade to reform executive pay bearing fruit?

    Is a quiet crusade to reform executive pay bearing fruit?

    Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
    The King David Hotel gives precious work to Palestinians - unless peace talks are on

    King David Hotel: Palestinians not included

    The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
    More people moving from Australia to New Zealand than in the other direction for first time in 24 years

    End of the Aussie brain drain

    More people moving from Australia to New Zealand than in the other direction for first time in 24 years
    Meditation is touted as a cure for mental instability but can it actually be bad for you?

    Can meditation be bad for you?

    Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
    Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

    Australia's first-ever Eurovision entrant

    Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
    Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

    Laughter, but no tears, as Letterman takes his bow after 33 years

    Veteran talkshow host steps down to plaudits from four presidents
    Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

    Hozier's 'blasphemous' song takes Novello award

    Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
    Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

    Join the tequila gold rush

    The spirit has gone from a cheap shot to a multi-billion pound product
    12 best statement wallpapers

    12 best statement wallpapers

    Make an impact and transform a room with a conversation-starting pattern
    Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

    Paul Scholes column

    Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?