Consortium negotiates outline terms to lease Westbury

The consortium of farmer-owned milk co-operatives has negotiated outline terms of a deal with receivers PricewaterhouseCoopers to secure the future of the Westbury plant. It is hoped a contract can now be finalised within two weeks.

Speaking at the Dairy Event at Stoneleigh, Warwickshire, co-op chiefs confirmed that a deal to lease Westbury has yet to be finalised, but both sides are confident of success.

The consortium has secured an assurance that the plant will remain operational while work on the deal continues – an assurance that will give Westbury’s direct suppliers confidence that their milk will continue to be collected and processed while the co-ops work to finalise an agreement.

In a joint statement, Malcolm Smith, chief executive of Dairy Farmers of Britain; John Duncan, chief executive of First Milk; and Barry Nicholls, chief executive of Milk Link confirmed: “Working together we have developed a business plan for the Westbury factory which provides the plant with a commercial future and offers farmers access to intervention markets.”

Addressing the question of how to proceed, the co-ops confirmed that the agreement is conditional on final agreement with the receivers, the outcome of the receivers’ negotiations with third-parties, and approval from Milk Link’s governing board and its financial backers.

Westbury Dairies Limited, the new company set up jointly by the co-ops, issued contracts to direct suppliers last week, asking them to sign-up by 22 September. The company also confirmed new payment terms for suppliers as well as details of its interest free loan offer designed to cover outstanding payments for those who take up its offer of a new supply contract.

Subject to a deal being completed, those signing-up to supply Westbury Dairies direct in future will receive a milk price based on the average published price paid by Dairy Farmers of Britain, First Milk and Milk Link.