FOLLOWING the announcement that First Milk is to sell its two Scottish creameries in Campbeltown and on Arran, the co-op has denied suggestions that it may be set to leave its Glasgow headquarters and move south of the Border.

That possibility was raised by dairy industry analyst Ian Potter, who said: “Once First Milk have exited the two creameries they will be left producing bulk unbranded cheddar at their Haverfordwest and The Lake District creameries, as well as their important partnership with Nestle.

“The obvious question is whether there is any reason First Milk need to retain a head office in Glasgow or anywhere else for that matter?" asked Mr Potter. “One option must be for First Milk to cut cost and run its various departments from either of the two creameries south of the Border.”

But the reply to The Scottish Farmer from First Milk was short and sweet: “We have absolutely no plans to move our head office," said a spokesman.

Mr Potter's broadside at the co-op also included the suggestion that it had unsuccessfully tried for at least three years to sell Campbeltown and Arran to numerous potential purchasers.

“Whilst Arran and Mull of Kintyre cheddar are both popular quality branded cheeses, the fact is First Milk have battled to make any money from them, so commercially they have to be disposed of as the co-op continues to divest itself of loss making enterprises and downsizes," said Mr Potter.

“For the 28 supplying farmers who produce circa 30 million litres of milk each year the news will be a blow but certainly not a complete surprise. Whilst the farmers will be hoping and praying someone will rescue both creameries, they will realise that if no buyers can be found, one or both creamery doors could be closed for good.

“Finding buyers looks like a challenge and as one potential punter commented to me: 'I can’t decide whether they are hospital cases or whether there is potential with a gem or a jewel to be had? Or will the supplying farmers be persuaded it is financially sound to back some form of management buyout?"

Mr Potter said that the farmers involved certainly need to be asking for clear timescales and a commitment from First Milk as to what safety net will be available if no buyers can be found within given time frames. "Will First Milk commit to collect and process their milk long term?" he asked. “Farmers will realise that if the doors are closed and if no commitment is given it will potentially immediately be followed by closure of their dairy farms unless they do a deal to sell their milk to a mainland processor and abandon the two brands. The main problem is transporting milk from this area is costly, as is the cost of production."