28 Nov, 2008 - Dairy Farmers of Britain ('DFB') has today announced that it has started employee consultation in respect of plans to restructure its business operations.
The restructuring proposed will see the business streamlined to remove sites that are not delivering acceptable returns and to provide an efficient and cost effective management structure. It includes:
The proposed closure of Fole Dairy in Staffordshire and Portsmouth Dairy in Hampshire
• The proposed rationalisation of distribution depots at Portsmouth, Cheshunt, Leeds
and Lincoln
• A reduction in corporate headcount at its office in Nantwich and Blaydon
• The creation of two autonomously managed divisions within the business
o Liquid Milk
o Milk Supply and Cheese
Despite the investments Dairy Farmers of Britain has made into business improvement, both through efficiency measures and through exiting loss-making contracts, it has not been possible to deliver acceptable returns within its liquid milk division without wide scale change. In the short term this had adverse effects on the overall performance of the
business.
With increased pressure from the marketplace, it is now essential to restructure the business to ensure that DFB can succeed in the future. The proposed restructuring programme is designed to return the business to profitability in the next financial year and to enhance member returns in the future.
DFB is committed to managing this restructuring process professionally as it may result in the loss of up to 640 jobs out of a total workforce of 2200. We recognise that this announcement impacts upon our employees at a difficult time and we will be working closely with employees, their representatives and local employment agencies to secure alternative employment for as many members of staff as possible.
Milk pricing
As a result of the downward pressure in the marketplace and the underlying performance issues in the business, the Board of Dairy Farmers of Britain has taken the decision to reduce member milk prices with effect from 1 November 2008. Cream prices have nearly halved in the last twelve months and input prices and energy costs have been at unprecedented levels, whilst volume continues to decline on the doorstep.
These external factors, when combined with the performance issues within the business, necessitate a reduction in member milk prices of 2 pence per litre for all members. This reduction will help contribute towards the restructuring programme.
Andrew Cooksey, Chief Executive Officer said “Dairy Farmers of Britain’s overall business performance has been hampered by continuing to operate with the current structure. This difficult but decisive action safeguards the business moving forward and is therefore in the best interests of our wider business, our members and our employees.”