GRAHAM’S The Family Dairy came under fire this week after sending its producers a letter warning them they could be penalised if they do not meet their A milk quota requirements.
It’s understood producers have been told by Graham’s they will be fined the difference between the A and B price for the litres they don’t produce. This could amount to between 6p and 7p per litre. 
Dairy industry analyst Ian Potter said: “The Graham’s letter beggars belief and I hope the family has cross checked this is permissible under its contract terms.
“This penalty system started with Freshways and it is causing a great deal of frustration and reputational risk with them but to date they have refused to back down, however some farmers have already voted with their feet and resigned.
“It’s no surprise that Graham’s is back in the news for the wrong reasons again. Last time was a 7.5p B per litre price.
“Lawyers are already scrutinising the Freshways contract and I suggest NFU Scotland takes a detailed look at the Graham’s contract as soon as possible in the interests of producers.
“What happens if a producer goes down with TB and loses animals, is he penalised? What if, as is the case with one Freshways supplier, they have to stop milking suddenly due to ill health?
“For the Graham’s farmers who have applied for the EU milk reduction payments it’s criminal that such a penalty scheme has been introduced without prior warning, and after the application window has closed.
“It’s time both the Scottish Government and UK Government looked into some liquid buyers actions.
“As far as liquid premium is concerned hard working, honest dairy farmers struggling to make ends meet are being throttled by milk purchasers they can no longer trust. This industry is going backwards at speed, not forward.”
NFUS president, Allan Bowie, told The SF: “We have not had any sight of the Graham’s letter. However, it is important that Graham’s producers sit down with the Graham family and discuss the situation. NFUS could facilitate such a discussion if approached.
“It is important producers discuss the Graham’s contract collectively and not go it alone. NFUS will not let this issue go.”
As The Scottish Farmer went to press on Wednesday, we were still waiting for Robert Graham jnr to return our call.
Meanwhile, First Milk announced a 5p B milk price for November for all membership pools taking it to 25p per litre, and a minimum 1p rise on A prices.
NFUS milk committee chairman, Graeme Kilpatrick, said: “This 5p increase to the B price is a strong indication that market returns for dairy products are improving.
“However, most farmers are selling the majority of their milk at an A price, which First Milk is increasing by a minimum of 1p. Major milk processors based in Scotland are still failing to deliver a sustainable price.”
Regarding the situation of First Milk producers on Bute, co-communications director, Paul Flanagan, along with council member, Scott Calderwood, met with half of the Bute producers on Tuesday and are set to make a return visit in two weeks to meet all producers with co-op chief, Mike Gallacher.
Producers with the Caledonian Cheese Company supplying Lactalis, at Stranraer, will see a 2p rise from November 1 and a similar rise from December 1.