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Business News

560 jobs axed as two dairies close

Around 560 jobs were axed today after two dairies owned by the failed Dairy Farmers of Britain (DFB) co-operative were closed by receivers.

DFB's Bridgend dairy is shutting down and its entire 279-strong workforce being made redundant, while receivers also announced the closure of the Blaydon dairy in the North East after sales talks collapsed, with most of its 290 staff being let go.

PricewaterhouseCoopers (PwC) said it was continuing efforts over the weekend to sell 19 depots related to the Blaydon dairy, with the future of a further 329 jobs hanging in the balance.

The depots are expected to close by Monday should buyers not be found.

Today's moves follow the closure of DFB's Lincoln dairy, with the loss of 127 staff, earlier this week.

The Blaydon dairy was the last of the dairies in DFB's liquids arm.

PwC said it had been unable to sell the businesses with the added pressure of customer withdrawal forcing the closures to avoid further losses.

Stephen Oldfield, joint receiver and manager of DFB, said they had worked "very hard" to find buyers for the various parts of the DFB business.

"However, the liquids business has suffered continuing losses and recent withdrawal of customers has compounded the problem.

"In the absence of buyers, we have already had to close the Lincoln and Bridgend dairies. There were urgent attempts today to secure a rescue deal for Blaydon with support from One North East and Defra, but the deal collapsed at lunchtime today when the buyer withdrew."

The DFB network collapsed last week, putting around 2,200 jobs at risk and dealing a major blow to its network of farmers, many of whom have lost life savings that were tied up with the co-operative.

It had 1,800 farmer members supplying more than a billion litres of milk to the food and drink industry, comprising 10% of UK production.

DFB called in receivers following heavy losses and the end of its contract to supply milk to the Co-operative supermarket.

Receivers said it was unable to pay farmers an economical price for their milk, leading to half of its members resigning since November.

The group had been offloading subsidiaries in an attempt to raise money, only recently selling off its Nene Valley packaged cream processor to Meadow Foods.

Earlier this week it was announced that dairy giant Milk Link agreed to buy the co-operative's Llandyrnog site in Wales, while Seriously Strong Cheddar maker Lactalis McLelland bought south Somerset-based Lubborn Creamery. Receivers said the deal secured the transfer of 500 jobs.

Today Mr Oldfield said receivers had contacted local competitors in Bridgend and Blaydon to help customers find alternative milk sources from next week.

PwC is negotiating to sell depots connected with Bridgend at Neath, Cardiff, Ebbw Vale and Bridgend.

Those depots connected with the Blaydon dairy are at Carlisle, Hillsborough, Blaydon, South Shields, Benton, Aberdare, Leeds, Tweedside, Scarborough, Team Valley, Norton, Cheshunt, Yorkshire, Portsmouth, Shiregreen, South Teesside, Bedlington, Enfield and Nantwich.