ALMOST 300 people are to lose their jobs after the collapse of a last-ditch effort to save a North East dairy.
A team of managers from Dairy Farmers of Britain (DFB), in Blaydon, had been holding urgent talks with receivers PricewaterhouseCoopers (PWC) in a bid to buy the site.
But the negotiations fell apart yesterday afternoon and the dairy will shut over the weekend.
The majority of the 290 staff were made redundant yesterday. A small team of staff will remain to help close the site, which received milk from 288 farmers in the region.
PWC is continuing negotiations to sell the dairy’s North East depots, which employ 329 people.
Stephen Oldfield, joint receiver and DFB manager, said last night: “The [milk] liquids business has suffered continuing losses and recent withdrawal of customers has compounded the problem.
“There were urgent attempts today to secure a rescue deal for Blaydon with support from One North East and Defra, but the deal collapsed at lunchtime today when the buyer withdrew.
“This has forced the decision to close the last dairy in the DFB liquids division at Blaydon with effect from this evening. Closure will avoid further losses being paid for out of farmers’ milk cheques.”
DFB went into receivership on June 3, owing £20m in unpaid milk cheques to its co-operative members.
But hopes were high yesterday morning that a deal could be struck to keep the site open.
Blaydon was the final DFB dairy still in operation after PWC shut the group’s sites in Bridgend yesterday morning and Lincoln on Wednesday.
John Boyle, who represented the Blaydon management buyout team, said the timing of funding issues thwarted a deal to save the site. He said: “There is a fantastic workforce here in the North East that sadly through no fault of their own will now be made redundant.”
One North East director of business and industry Ian Williams said: “We estimate that over 500 people are directly or indirectly employed by the dairy in the North East and its closure will impact significantly on regional farmers who rely on it to bring their milk to market.”
A Defra spokesperson added: “We are very disappointed that a huge effort from all parties was unable to deliver a deal that would enable Blaydon dairy to remain open.
“It is particularly bad news for the employees, customers, and farmer suppliers.”
Dairy farmer Dennis Gibb, who sits on the NFU’s regional dairy board, and co-runs Eachwick Red House Farm, near Newcastle, said the news was devastating for the region’s milk producers.
“The thought of Blaydon having to close down fills me with absolute horror,” he said. “The worldwide milk market will be partly to blame. The world is saturated with dairy produce at the moment, which has undermined the milk price, which has of course made it more difficult.”
Many North East DFB members have struggled to find alternative buyers for their milk since the co-operative went into receivership because of their locations.