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

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:

sells off Lubborn Cheese after Dairy Farmers collapse

Related reading