Arla amba merger decisions

[Riggy]

What's everybody's views on this? On a tesco contract at the moment, wondering whether to go on a direct contract with arla uk or join the co op on a tesco contract with amba. The direct contract would be on a cost tracker. The amba contract would be the amba price plus .7p for tesco and a 13th payment starting in the 3rd year of joining. Question is how long will tesco carry on with the tracker and also where will prices be in a few years time? Million litre producer by the way. Which ones better. Discuss!

 

[Yatesbros1]

Discussed on Ian Potter's newsletter this week.

 

[Moors Farmer]

Discussed on Ian Potter's newsletter this week.

Only vaguely.

What do you define a larger producer as?
My thoughts are - going into the merger is (for a smaller producer, ie 1 million litres) is a good idea if you're in it for the long term. If you're not, the world is your oyster.

Personally I'm off to MW with the Tesco contract - which straight away gives me an extra 1ppl over the current Arla Tesco price. Having said that - I may well have a closer look at the MW formula price (currently at 34.55ppl) and ditch the Tesco contract as well.

 

[Riggy]

Apparently MW farmers in our area are only selling 75% of their total volume to tesco because of over supply within their group! the other 25% is on standard contract

 

[farmerste]

tesco did say that they would only scale back the arla co-op members and those on a direct arla contract would still be able to send 100% of their milk to tesco in the event of oversupply

 

[Riggy]

There's been a lot of rumours about being able to take your tesco contract to MW with you, however they are only tendering for the tesco work right now, they will find out at the end of November. A bit late if anyone is thinking about going into the co op. We've always avoided co ops like the plague but apparently this one is different??????

 

[rusty]

Speaking as an Arla non aligned producer the decision to sign up was a no brainer for me. The main question I suppose is how long will the Tesco type contract be around. They virtually came in overnight and could go out the same way. What is the purpose of the Tesco contract? From my point of view it is mainly a PR exercise .With stronger demand worldwide for dairy products and hopefully better prices going forward is their the need for the 'Tesco safety net'?