FIRST MILK has announced an employee consultation on its proposed intention to close Campbeltown Creamery. This puts 14 jobs at risk.

The Campbeltown Creamery was put up for sale in April 2018 when First Milk announced that it was 'not core' to its business strategy for the future. Despite significant effort over the last 18 months, it has not been possible to conclude the sale of the Campbeltown Creamery.

When it became clear that a sale to a third party was unlikely, the local Kintyre farmers launched a plan to take over the creamery. Despite considerable work to find a way to take the business forward, especially from their steering group, advisers, the Scottish Government and the creamery's staff, they have not been able to find a financially viable long-term business plan for the creamery.

Commenting on the announcement, First Milk chief executive Shelagh Hancock said: “We are disappointed that it has not been possible to conclude a sale of Campbeltown Creamery. We fully appreciate that this decision has significant consequences for colleagues at the Creamery and the local community, but it is important that we act in the best interest of the wider business and our farmer members and continue with the solid progress we have made in strengthening and developing First Milk.

"We regret the impact this decision will have on our colleagues and are committed to treating those affected fairly and with consideration during this difficult time.

“Throughout the last 18 months we have been in regular dialogue with our local members on Kintyre about the future of the site. Nothing will change in respect to their co-operative membership of First Milk, and we will continue to collect and pay for their milk on the same basis as before going forward,” she assured.

James Barbour, chairman of the Kintyre steering group, added: “It was the right thing to investigate all avenues to see if we could keep the creamery open in Kintyre. There was widespread enthusiasm from the local farmers to try to secure the future of the site and genuine support from First Milk, the Scottish Government and the local community, along with a successful crowd-funding campaign.

"Despite all of this we were not able to find a financially viable long-term solution for the creamery. I would like to thank everyone who has supported us through this period.”

NFUS dairy committee chairman and local Kintyre dairy farmer, John Smith, said:“My heart goes out to all the staff that work at the creamery and it is regrettable that the Mull of Kintyre brand that we have passionately supported will now no longer be available. That is due to the harsh, economic reality of processing milk in an incredibly tough dairy industry that has witnessed so many casualties at both farm and processing level in recent times.

“Whilst this is very disappointing news, it is reassuring that all of the local farmers are members of First Milk and will continue to benefit from being part of a national co-operative with an evergreen contract and continuing to have their milk collected in the future.”

The Scottish Farmer understands that close to £100,000 had been raised by a crowdfunding appeal, but that a key part of the deal for further funding streams – including private backers and the Scottish Government – was to secure a supermarket contract to take cheese from the plant, but that had faltered.

It is thought that Sainsbury’s had come closest to making a deal, but that it had taken cold feet following the collapse of the Wrexham-based Tomlinson’s Dairies operation, which supplied milk to the supermarket from aligned and unaligned contracts.

Now in dispute about paying those farmers out, Sainsbury’s seems to not want a similar ‘all in one pot’ arrangement in Kintyre – though it is believed that the supermarket’s buyers liked the story behind the creamery, the region the milk is produced in and the 29 farms that supplied it.

Steering group member, Sandy Pirie, who has 200 cows at Machrihanish Farm, said he was disappointed with the news, but did not think this was the end for milk production in the area: “If First Milk are true to their word, then they’ll be prepared to haul the milk to Glasgow. They have told us they have no intention of charging haulage.”

The creamery has had a chequered past and was thought to be losing £600,000 per year, though local farmers estimated it will cost £750,000 per year to haul the milk off the peninsula to other facilities. A regular ferry service from Campbeltown to Ardrossan would help reduce that cost, though at the moment this only has a summer timetable.