Müller's dairy farmer suppliers in Scotland with higher milk output will pay higher transportation charges than their counterparts with a moderate rate of growth, beginning February 2020.
It is part of a set of measures announced by the dairy giant to tackle the problem of excess milk production in the country.
Müller will also reduce the overall volume of its milk purchases in the country by serving a full year’s notice on a number of dairy suppliers in the North East of Scotland.
The measures are an outcome of a month-long review conducted by the company in consultation with the Müller Milk Group farmer board that represents dairy farmers, National Farmers Union Scotland, and Scottish Government.
'Unwelcome And Destabilising'
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 North East of Scotland, but the current situation is unviable and we must act.
"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."
Scottish farm milk production has increased by 25%, which is substantially more than the demand of local consumers.
Müller’s 230 Scottish dairy farmer suppliers have cumulatively increased production since 2014 by the equivalent of 33 litres of additional milk per annum for every person in Scotland, the dairy company said.
'Demand For Fresh Milk'
Hutchison added, "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.
"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."
Presently, Müller is transporting surplus milk to England, where the demand for fresh milk is higher.
It has resulted in more than 6,000 tanker movements, travelling a total of 2.5 million miles each year, the dairy giant said.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.
