Dairy giant Müller has acquired Yew Tree Dairy, a family-owned British dairy producer, in a move aimed at bolstering its milk powder production and export capabilities.

Yew Tree Dairy, based in Skelmersdale, West Lancashire, specialises in fresh milk and cream as well as milk powder production. Müller says the acquisition will enable it to leverage Yew Tree’s manufacturing know-how to drive supply chain resilience and growth in its export business.

“This significant investment in the British dairy industry underlines our ambition to grow Müller and build a better future for the sector,” said Rob Hutchison, CEO of Müller Milk and Ingredients.

Completion of the deal is subject to approval from the UK’s Competition and Markets Authority. Once finalised, Müller plans to invest heavily in expanding the capacity and capabilities of Yew Tree’s milk drying facility in Skelmersdale.

“Tapping into internal expertise and experience from across the Müller group, the business will enhance its milk drying capability, enabling it to become a major producer and exporter of powdered milk products made in Britain, with milk from British dairy farms,” the company said in a statement.

The acquisition will allow Müller to better serve its customers, consumers and supplying farmers while strengthening the overall resilience of the British dairy industry, according to the company.

Carl Woodcock of Yew Tree Dairy added: “The key for us was to find a buyer that not only shared our values but had an exciting vision for the future of the great British dairy industry. Following a competitive process, Müller was our clear preference, and we leave our business in really good hands.”

NFU Scotland milk committee chair Bruce Mackie said: “This is a major rationalisation within the dairy sector and will affect a significant number of dairy farmers across Scotland. In the last few hours, five Yew Tree suppliers have already contacted the Union.

“Any contraction in the number of available milk purchasers is clearly a concern as competition for milk, particularly in more remote milk fields, is an important factor in not only securing a fair price but maintaining dairy production in all parts of Scotland.

“We have a good working relationship with both Muller and Yew Tree. Members of the Milk Committee have had dialogue with Yew Tree representatives in recent months and we are schedule to meet Muller in the next few days. That will allow us to seek clarification on contractual and collection arrangements as well as a timescale for the change taking place. We would also seek more information on the planned investment by Muller in the Yew Tree site at Skelmersdale and whether that brings opportunities for Scottish milk.

“What we do know is that affected producers will be issued with new contracts and that these will be amongst the first to be issued under the new statutory arrangements for milk contracts, recently agreed by Parliament and which come into force across the UK in July.

“On behalf of affected milk producers, we will be looking to the companies to quickly set up support helplines and producer meetings to answer the many questions that affected dairy farmers will have. A sudden change in milk purchaser and contractual arrangements is always a time of worry. Many will also point to Muller’s decision to walk away from Aberdeenshire in 2019 and we will be seeking cast iron reassurances on its commitment to producers in that area who are now supplying Yew Tree.

“If NFU Scotland or the Scottish Dairy Hub can assist any affected producers, then we urge them to get in touch.”