FIRST Milk is set to sacrifice its cheese production capacity in Scotland, putting its creameries in Campbeltown and Arran up for sale.

The move was announced to producers on Tuesday in a Campbeltown hotel by First Milk chief executive, Sheila Hancock, who told them that following a review the two creameries were no longer a strategic fit for the co-op

Only around half of the 29 producers in the Kintyre milk field were there to hear the news.

She stated: "A sale would enable us to continue with our focus on developing our major creameries in Haverfordwest and the Lake District and delivering best value for our members' investment. The review identified that there is undoubtedly a market for the premium Mull of Kintyre and Isle of Arran brands but capturing the opportunities would require significant investment that is not core to our strategic direction

"Campbeltown and Arran creameries will continue to run as normal during the sale process and we will be working closely with prospective buyers to ensure a smooth transition," she said.

In response, it has already been suggested that a positive outcome would be to follow what is known as the 'Orkney model' where producers who supply the Kirkwall creamery own 70%, Lactalis which markets the Orkney brand 30% and the local council 10%.

NFU Scotland milk committee chairman John Smith, who supplies milk to Campbeltown, agreed that the Orkney model was worth consideration: "The track record of First Milk working with Scottish authorities has been poor to say the least, but NFUS has already spoken to Argyll and Bute Council, Scottish Government and SAOS regarding the announcement and the next steps will be discussed at a meeting of producers, scheduled for next week.

"We have also spoke to Paul Grant, chair of the Scottish Dairy Growth Board, who told us he believes there is real opportunity here for someone to tap into a market with potential to grow and that the model at Orkney creamery is working well and that his board would be keen to support any potential buyer for Campbeltown or Arran."

Possible candidates to take over control of both creameries are Grahams The Family Dairy and Lactalis.

Robert Graham told The Scottish Farmer: "As a Scottish family dairy business we are committed to the Scottish dairy industry. We haven't had time to consider if there are opportunities given First Milk's announcement.

"It is well known that we have plans to make the largest investment in The Scottish dairy industry in over a generation at a new site in Stirling – frustratingly these plans are still on appeal at Scottish Government."

Lactalis are noted for being tight-lipped on milk issues but Rory Christie, chairman of the Milk Suppliers Association which is associated with its Stranraer operation, said: "It may be something they would consider. My personal view is that the sale of the two creameries could be the start of something good for the producers involved."

Campbeltown producer Robert Millar said: "I'm quite excited. First Milk is not closing the site, it's just for sale giving us the opportunity to move on with someone else. I see this as a positive opportunity. Kintyre is a tight milk field of family farms with a large proportion of young farmers giving any prospective buyer a guaranteed milk supply well into the future."

But far from happy was former First Milk area representative Sandy Pirie from Machrihanish, who stated: "We have definitely been sacrificed. This is a bitter pill to swallow. Our fate was sealed four years ago when the then directors signed a deal with Irish outfit Adams Foods, a deal which made production of cheese in Kintyre difficult to make profitable.

"First Milk is no longer a co-op and hasn't been for years," he claimed. "They took thousands of pounds from us in the form of 2p a litre for 18 months during 2015-16 in order to keep the business afloat. What do we get? A kick in the nuts."

Stuart Reid from Lamlash, the main producer on Arran along with the only other island producer John Murchie, said: "It's early days with regard to what will happen and too early to make any decisions. Hopefully something positive will emerge at the end of the day. If not we will see what happens after that."