Muller closures sparks fears for Scottish dairy farming

Dairy giant Muller is to close two processing sites in Scotland, in a move unions have labelled "devastating" and which they warn poses a threat to dairy farming in the north-east of the country.

After concluding a consultation launched back in March, the company confirmed it is to shut its dairies in Aberdeen and East Kilbride, in South Lanarkshire, with the loss of up to 225 jobs. It will centralise production at its Bellshill facility in North Lanarkshire.

The plants have been "operating well below full utilisation" for some time and the "the status quo was not sustainable", Sky News reports the company as saying. It has pledged to invest £15m to modernise Bellshill over three years, to "broaden the range of products it is able to make" and "optimise the value in the milk we buy from dairy farmers".

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While Muller said the East Kilbride site will remain open for up to two years, the Aberdeen dairy will close "as soon as reasonably practical".

There is a double blow for the 43 farms in the north-east supplying the Aberdeen site. They will face a 1.75 per litre surcharge to transport milk over the longer distance to Bellshill if they wish to continue supplying Muller, which STV estimates will add £26,000 a year in additional cost.

Those not wishing to pay will see their contracts terminated after 12 months, which Muller said will give them "time to make alternative arrangements for their milk production".

Jean McLean, NFU Scotland's milk committee representative for the north-east, said: "The announcement… is deeply disappointing and could impact the viability of the dairy industry in the north east of Scotland. Many businesses are not in a good place and this will leave many considering if they have a future in dairying."

Fellow union Usdaw said its members were "devastated" by the decision.

Dairy farmers are already under intense pressure and have been protesting since last year over a persistent decline in wholesale milk prices that threatens to push thousands of farms out of business. While originally targeting supermarkets, more than 1,000 farmers marched on Downing Street to demand more action from the government in March.