Müller is serving 12-month notices to stop contracts with 14 dairy farmers in Aberdeenshire as part of plans to reduce overall milk volume.

Milk surplus is being blamed by the major milk company as they seek to reduce the amount of milk they purchase from their 230 milk suppliers in Scotland.

Most of their remaining dairy farmers will face additional haulage charges for transport of milk to England for processing.

Charge

Farmers who have increased their volume of milk by over 15% face an additional charge of 0.85p/l, those who increased between between 5% to 15% will see an additional charge of 0.55p/l and those who saw an increase of less than 5% in their milk production will have a charge of 0.25p/l.

The charges are due to come in February 2020 and reviewed annually.

Suppliers who are already being charged a haulage charge of 1.75p/l will not be subjected to the changes.

Müller states that since 2014, there has been an increase in milk production by their suppliers equivelant to 33l of milk for everyone in Scotland, which has resulted in significant volumes of milk going to England for processing.

Rob Hutchison, milk supply director for Müller Milk & Ingredients, said: “We fully appreciate that these measures will be extremely unwelcome and destabilising for our farmer suppliers particularly in the northeast of Scotland, but the current situation is unviable and we must act.

The current situation is unviable and we must act

“We completed the largest single investment in fresh milk processing in Scotland in more than a decade at our dairy in Bellshill last year and we will continue to do what we can to stimulate new demand for fresh milk.

Decline

“But with fresh milk already in 96% of the nation’s fridges and overall consumer demand for the product in marginal decline, the reality is that it is extremely unlikely that this sector will soak up the heightened levels of milk production from farms which we have seen.

“Our farm services team will now work closely with affected dairy farmers and we will do everything in our power to help them adjust to the changes which we must now make.”

Devastating

NFU Scotland president Andrew McCornick said: “This is clearly devastating news and the livelihoods and viability of all those Scottish dairy farmers supplying Müller have been undermined by the outcomes of this review. None more so than the 14 dairy farmers in Aberdeenshire who have just been served 12-month notice by the company.

“Given the considerable commitment and investment made by dairy farmers, we now have producers looking to find a new buyer in the next year if they wish to continue milking cows while others, through haulage charges, face a significant cut in income at a time when milk prices are struggling to cover the cost of production.

“For those served notice, Müller are having a face to face meeting with these farmers in Aberdeen next week and NFU Scotland has asked if we can attend to support those farmers affected.

Dialogue

“Since Müller made its original announcement, NFUS has been in – and remains in - regular dialogue with several stakeholders in the sector in Scotland and beyond, including Scottish Government, in a bid to offer solutions to this announcement.

“It is a further sign of deep-rooted issues within the UK liquid milk market. As part of a joint UK Union initiative, NFUS last week sent a letter to Rt Hon. Neil Parish MP, Efra Committee Chairman demanding an urgent, short-life investigation by Westminster into fresh milk to determine what has led to the recent destabilisation of the UK liquid milk market.

“NFUS have been offered full support on this issue from our colleagues in NFU England and Wales and NFUS is meeting senior officials from milk processor body, Dairy UK, next month to discuss issues surrounding the dairy supply chain in Scotland.”