FDBusiness.com

Müller Milk & Ingredients (MMI), Britain’s largest producer of branded and private label fresh milk, cream, butter and ingredients products, has confirmed that it is to wind down production at its Foston dairy in Derbyshire with the potential loss of 223 permanent posts. The facility is likely to cease operations by the end of the year with processing absorbed by other MMI dairies.

The decision follows a 45 day statutory review of the company’s dairy network which examined factory utilisation against a backdrop of declining consumption of fresh milk and significant changes in retailing. During the review, Foston dairy was identified to be most at risk due to its size and inability to absorb significant production volume from other dairies, its current level of utilisation and its geographical position relative to customers.

Patrick Müller, chief executive of Müller Milk & Ingredients.

The consultation included discussions with employees, unions and other employee representatives and the company has committed to providing support for all of those affected over the wind down period. Most dairy farmers who supply Foston will be unaffected with milk switched to be processed at other dairies.

Patrick Müller, chief executive at Müller Milk & Ingredients, comments: “We fully recognise that this decision will be devastating for our employees at Foston, but if we are to have any prospect of building a fresh milk business which is sustainable in the short and longer term, we need to make significant changes to reduce our costs. MMI has the best invested network in our industry. But we must adapt quickly to meet the realities of a changing market. Inaction is not an option and would place at risk the future viability of fresh milk, long regarded as a staple of the nation’s fridges.”

The dairy network review was part of MMI’s Project Darwin programme which aims to secure a vibrant and sustainable future for the business through cost reduction and margin improvement.

The transformation programme includes a comprehensive review of every aspect of MMI’s operations, logistics, back office and people organisation to simplify the business, reduce costs and increase customer focus and accountability.

MMI is part of Müller UK & Ireland, which is wholly owned by Theo Müller Group of Germany. In the UK, Müller develops, manufactures and markets a wide range of branded and private label dairy products made with milk from more than 1,650 British farmers.