HUNDREDS of jobs are under threat after a milk production site went into receivership.
The Dairy Farmers of Britain, which employs 2,200 workers across three UK sites including Blaydon, in Gateshead, has struggled with the falling price of milk and dairy products.
The price of milk has plummeted in recent months forcing DFOB to make the move. But it comes as a blow for 600 farmer members across the North. It is feared many will not be paid for last month’s milk.
Blaydon is the only big milk production site in the region, manufacturing about 180 million litres of fresh milk, cream and orange juice each year, leaving Northumberland farmers having to transport milk to Leeds or Lockerbie in Scotland. The price of milk has dropped due to a worldwide increase in supply. The recession has also reduced the demand for luxury products such as cheese. Wholesale and retail power has also driven down value.
Dairy farmer Dennis Gibb co-owns Eachwick Red House Farm, near Newcastle, with his brother Richard.
The NFU dairy board member said: "It’s very worrying for DFOB members who will be wondering when they will be paid for their milk. Dairy farmers have been worried for a long time about this.
"It will be an awful pity if the site closes down as it is the only producer of any size in the North East. Let’s hope someone can take over the business and make a go of it Its all down to supply and demand, and the market is oversupplied. The world is awash with dairy products. Demand for dairy produce has also dropped due to recession. It’s a double whammy."
Dairy board chairman of the National Farmers’ Union, Gwyn Jones said: "I am furious to hear farmers will not be paid for their milk and I know that many farmers are desperately concerned about not finding a buyer for their milk. I will do everything in my power to help those caught up in this nightmare."
Last night workers at the 35-year-old site said they had feared the worst since the firm lost a contract with the Co-op.
One worker, who did not want to be named, said: "It’s been on the cards for some time. The Co-op contract has been lost and that’s 60% of the work gone."
Another employee said the news had hit him hard. He said: "It’s really worrying. I’ve been working here 12 years and for this to happen is just a nightmare."
Administrators PricewaterhouseCoopers are looking for a buyer to take on the business.
DFOB chairman John Grantchester said: "What is most important now is that the supply chain is maintained through to our consumers, that jobs are saved, and that there is a home for our members’ milk. We will do whatever is appropriate to assist the receivers in achieving this outcome."