PwC sells Dairy Farmers division but closes another

Receivers from PwC have pulled off the sale of another division of Dairy Farmers of Britain Ltd, the milk-producing co-operative which collapsed last week.

Stephen Oldfield, David Kelly and Ian Green have now sold the Llandyrnog Creamery unit to rival company Milk Link, a move which has saved the jobs of 170-strong workforce.

So far the receivers have saved more than 500 jobs by selling off parts of the business, but the administrators have also had to close dairies in Lincoln and Bridgend at a loss of 406 jobs.

The trio continue to have urgent discussions with an interested party over a rescue bid for the Blaydon dairy site, which employs 290 staff.

It has emerged that some of the Bridgend's unit's key customers pulled out when the receivership was announced, causing significant losses and potential acquirers to withdraw.

The Dairy Farmers business is run on the basis that losses are paid for out of farmers’ milk cheques. Given the farmers had already lost significant sums, the recivers said, they could not expect them to continue to fund the liquid division’s losses which ultimately led to the closure.

Dairy Farmers went into receivership, putting the futures of 2,200 staff and 1,800 farmer members in doubt, but PwC is making some headway in selling off the attractive parts of the business and preserving jobs.

Stephen Oldfield, joint receiver said: 'We’re pleased to announce a sale that secures jobs for all the Llandyrnog Creamery workers and new milk contracts for the relevant farmer members a week into our appointment and wish Milk Link well with their new acquisition.'

The Creamery is a key part of the North Wales farming and rural community, manufacturing traditional Welsh cheese for nearly 100 years principally under the Cadog, Dairy Farmers of Britain and own brand labels. The site is supplied by around 250 farmers from North Wales and the borders region and uses around 180 million litres of milk a year.

But appeals had to be made to stop the farmers from withdrawing their services to the Creamery as the receivers worked to complete the sale.

Stephen Yates, chairman of the Member Council of Dairy Farmers of Britain, said: 'Llandyrnog is a good business but was reliant on our members staying with the receivers and managers while a sale was secured.

'The council district and regional chairman held urgent meetings with the relevant farmer members in Wales and the borders immediately following the appointment of the receivers and managers to explain the position on Llandyrnog.

'This ensured the milk field was retained while council negotiated with Milk Link to secure attractive milk contracts, which were conditional upon its purchase of Llandyrnog. I am delighted the strategy has paid off and those far mers now have a new milk contract to allow them to continue farming in this very beautiful area of the British Isles.'

Further reading:

PwC sells off Lubborn Cheese after Dairy Farmers collapse