A major £45 million investment by Muller into its Skelmersdale site has been hailed by the industry as a clear sign of confidence in the future of the UK dairy sector.
The dairy giant confirmed it will upgrade the facility—acquired as part of its purchase of Yew Tree Dairy in October 2024—aiming to transform it into one of the UK’s largest and most flexible milk balancing hubs.
The multi-million pound investment in the Lancashire site will enhance liquid milk production, milk drying capabilities, and overall product quality.
Alongside infrastructure upgrades, dairy processor Muller announced it is strengthening its relationship with supplying farmers.
As part of a long-term programme to ensure security of supply and foster progressive, sustainable dairy enterprises, the company will roll out its incentivised Muller Advantage scheme to Muller Direct Skelmersdale farmers.
The programme is designed to help producers proactively address key areas such as responsible sourcing, environmental impact and animal welfare.
Muller will also introduce a revised contract structure aimed at delivering greater pricing transparency and long-term stability.
Responding, NFU Dairy Board Chair Paul Tompkins said: “The NFU welcomes the announcement of further investment in UK dairy processing and sees it as a demonstration of another global brand’s long-term commitment and confidence in the future of British dairy."
Currently, most Skelmersdale suppliers receive an ingredients-only price. But from 1 November 2025, they will be able to choose between two pricing models, including a new Muller Direct Skelmersdale price, calculated using a blend of Muller’s existing liquid and ingredients pricing based on global indices.
Producers can also choose a traditional Muller Ingredients price, with the processor saying this change will result in higher and more stable returns for most suppliers, helping them plan more effectively for the future.
Mr Tompkins noted that dairy farmers supplying the Skelmersdale site have faced significant disruption since the acquisition of Yew Tree Dairy, creating widespread uncertainty within the milk pool.
However, he said: "I am pleased to see Muller attempting to address this via a new incentivised Advantage Programme and a more stable price offering."
While he expressed hope that most farmers would benefit from more consistent and increased returns, he acknowledged that not every production system stands to gain equally.
Mr Tompkins also stressed the need for Muller to maintain strong communication and collaboration with both its suppliers and customers to support a smoother transition and deliver fair and transparent pricing.
He said: “It is important that Muller continues to work closely with all suppliers to ease the pressure of any transition and help ensure producers receive a fair, transparent and sustainable price which aligns with the spirit of the new fair dealing obligations regulations."
At the time of the acquisition last year, Mr Tompkins emphasised the need for clear communication, stating: “It is vital that these producers are continued to be kept fully informed and receive regular updates to ensure any impact on their farms and businesses is fully understood.”
Completion of the Skelmersdale investment is expected by the end of 2026.
