First Milk may now close Arran site

First Milk may now close Arran site

First Milk, the UK dairy co-op, has set out changes to plans announced last year for the future of one of its creameries in Scotland.

In April last year, First Milk said it would look to sell a creamery on the Isle of Arran and another further west on the Kintyre peninsula in Campbeltown as they were no longer "a strategic fit" for the business.

However, the company has started talks with staff over the closure of the site on Arran after being unable to find a buyer.

First Milk is in negotiations to sell the Campbeltown facility to a group of its farmer-members on Kintyre. Nevertheless, despite being "hopeful" of sealing a deal over the Campbeltown creamery, First Milk said it had also started to consult with staff about "scaling down" the operations at the site.

"We are deeply disappointed that it has not been possible to conclude a sale of Arran Creamery. We remain hopeful that it will be possible to secure the future of the Campbeltown Creamery in the ownership of the local farmers and the proposed changes that we have announced today will help with that," First Milk chief executive Shelagh Hancock said.

"We fully appreciate that these developments have significant consequences for colleagues at the creameries and the local community, but it is important that we act in the best interest of the wider business and our farmer members and continue with the solid progress we have made in strengthening and developing First Milk."

The Torrylinn Creamery on Arran manufactures First Milk's Isle of Arran Cheddar. Asked about the future for the brand, a spokesperson told just-food: "For the immediate future the cheese will still be available as normal. Beyond that, the future availability depends on the outcome of the consultation process. We will obviously keep our customers informed about stock availability moving forward."

The Campbeltown Creamery is home to the co-op's Mull of Kintyre and Campbeltown Creamery cheddars, as well as the brand Scottish Pride. The site also manufactures own-label retail cheddar products and makes butter sold under the Scottish Pride brand.

James Barbour, the chairman of the Kintyre milk producers working group, said it is "important to retain processing capacity on Kintyre for the long-term security of the dairy farmers here".

Barbour added: "First Milk has worked hard to secure a sustainable future for the Campbeltown Creamery over the last 12 months. We are working together to try to secure the site for the future, although there is still considerable work to do to bring this to a conclusion."

The closure of the facility on Arran and the sale of the site on Kintyre would leave First Milk with two creameries - one in the Lake District in England and another in Haverfordwest in Wales.

First Milk's most recent publicly-available annual report covers the year to 31 March 2018. During that year, the co-op generated turnover of GBP252.7m (US$314.3m), versus GBP206.5m a year earlier. Operating profit before exceptional items stood at GBP6.6m, down from GBP11.7m in the previous financial year. Net profit was GBP3.2m, against GBP6m in the previous fiscal year.