Tomlinson's dairy

[Alfred]

From Ian Potter

Sainsbury Tender triggers several farmers fury from those put on a Bosman from Muller to Tomlinson’s (19th September 2019)
Sainsbury’s held its third Dairy Development Group (SDDG) aligned farmer meeting near Knutsford, Cheshire yesterday (18th) and unlike the previous two SDDG meetings this week it was far from plain sailing with one side of the room having smiley faces and the other side red steaming faces as blood pressure rose.

The free movement/transfer of SDDG farmers is the big bone of contention especially those in Cheshire who from 1st October 2020 will cease to be Muller SDDG producers and move on the dairy equivalent of a free Bosman transfer to Tomlinson’s Dairy in Wrexham, Wales.

These farmers didn’t hold back and aired their concerns and worries over the free transfer and their fears over the finances. The end result was an agreement for those concerned farmers to have two further area meetings next week involving Tomlinson’s to discuss the farmers very business like and reasonable request that Sainsbury’s guarantee their milk payments in the event Tomlinson’s business is completely derailed.

In reality Sainsbury’s simply cannot stand by and allow Tomlinson’s to head downhill. Recently progress appears to have been made to turn the fortunes of Tomlinson’s around from its low point around 18 months ago following Tomlinson’s first experience in processing Sainsbury’s milk which lets say didn’t go according to plan.

However along came the appointment of Stephen Oldfield, who has been previously nicknamed the GB dairy undertaker having been involved with several dairy receiverships including DFOB. On this occasion he is more of a magician working hard to turn the business around and playing match maker trying to marry or continue the 3 year relationship between Sainsbury’s and Tomlinson’s rather than organising a funeral as was first feared.

Sainsbury’s won’t be able to say to the farmers it’s nothing to do with us if Tomlinson’s fail because the PR outfall will be unimaginable. Incidentally Ian thinks it is highly unlikely Sainsbury’s would allow it to happen during the rumoured 3 year Tomlinson’s contract extension until 2023.

If next weeks meetings in Cheshire and Skegness result in Sainsbury’s providing guarantees to the farmers all should be well. If not it will be interesting to watch how many affected farmers explore other outlets including the possibility of a Muller direct contract, if available which might not be automatic.

Its likely common sense will prevail and all 53 farmers who are been told they are moving will run with it. It’s a postcode lottery over which the farmers have no control or say and one wonders how the Industry has reached this bizarre situation.

Those moving from Tomlinson’s to Muller were smiling yesterday the others going the other way concerned but at the end of the day the likelihood is few will give up the 4ppl premium the SDDG contract currently delivers over some alternatives. Some will not be happy but a 4ppl price drop is a tough pill to swallow in this environment.

One final interesting move is the hauling of only six farmer’s milk from Skegness to Tomlinson’s a round trip of over 400 miles which for the fastest route passes Arla Leeds and Muller Manchester processing plants. The total transport cost is likely to be at circa 4ppl especially given it has to be packed and transported back to regional depots and stores in the area. That’s a serious cost and does nothing to reduce Sainsbury’s environmental footprint. So long as its Sainsbury’s footing the bill Tomlinson’s and the farmers won’t be too concerned.

Didn't Chris Walkland write an article several months ago in British Dairying warning producers about the state of this buisness?

 

[I thats it]

Didn't Chris Walkland write an article several months ago in British Dairying warning producers about the state of this buisness?

Yes but I think in the last article he said they'd made some kind of miraculous recovery

 

[Tarw Coch]

How many farmer suppliers do they have? Sorry to hear the sad news.

Not big numbers, about 70 rings a bell but don’t quote me on that

 

[Surface Tension]

Almost half the farmers supplying milk to closure-threatened Tomlinsons Dairies are likely lose up to six weeks of payments, according to an industry analyst.

The rest, who are on aligned supply contracts with Sainsbury’s, face an anxious wait to find out if they can recover what they are owed.

Around 40 Tomlinsons farmer suppliers were on aligned contacts with Sainsbury’s as part of its Dairy Development Group.

A further 30-35 were on non-aligned contracts and any hopes they have of recouping their losses will rest with the official receivers, if and when they are appointed.

https://www.dailypost.co.uk/news/local-news/tomlinsons-farmer-suppliers-find-new-17083781

 

[Bald Rick]

Got a hefty Welsh Government subsidy/grant to build their new factory quite recently IIRC

Was right. WAG gave them a grant of £5m and they borrowed another £15m for the new factory.

 

[JeepJeep]

BBC reporting they're in Administration.

 

[Bald Rick]

BBC reporting they're in Administration.

Aye .. story here:

Tomlinsons Dairies in Wrexham goes into administration

Tomlinsons Dairies employed 330 staff and the owners say they are "devastated".

www.bbc.co.uk

Know Richard Tomlinson quite well but not the two brothers running the factory.
Dairy UK does not need yet another outlet being closed. Doubt if PWC will be able to find a buyer?

 

[Ormond]

Very convenient time for them to go bust , poor farmers owed a month and a halfs milk cheque! ?

Seem to remember when dairy farmers of Britain went down ....we lost 6 weeks in milk payment....

 

[upnortheast]

Just looked on company check. Up until 2017 they seemed to be sailing along nicely.
Looks like their association with Mr Sainsbury & the £15m borrowing tipped them over the edge
Looks like the only kit the bank did not have a charge over was their wellies

 

[JeepJeep]

What were they using the sites in Ruabon for? The Bigger one was up for £900K before they moved in fair sized yard with offices and big workshops..

 

[Farfrae]

Tomlinsons Dairies in Wrexham goes into administration

Tomlinsons Dairies employed 330 staff and the owners say they are "devastated".

www.bbc.co.uk

 

[Martin Holden]

With the losses allegedly made by this processor and reports that Medina are also in a loss making situation, where is the margin in the milk chain? Is it a case of simple over supply or is the product on the shelf in the supermarkets and shops just too cheap? With all the talk about Brexit and trading along with tariffs, it would be irresponsible in huge terms to let the UK Dairy trade just die out. Talk of low or no tariffs on food imports yet potentially very high ones on UK exports is like shooting ourselves in the foot. What happened to UK first? Willing to be corrected if I have the wrong end of the stick.

 

[upnortheast]

With the losses allegedly made by this processor and reports that Medina are also in a loss making situation, where is the margin in the milk chain

A bit of time on company check shows a number of dairy processors a lot nearer the edge than is good for them

 

[rusty]

With the losses allegedly made by this processor and reports that Medina are also in a loss making situation, where is the margin in the milk chain? Is it a case of simple over supply or is the product on the shelf in the supermarkets and shops just too cheap? With all the talk about Brexit and trading along with tariffs, it would be irresponsible in huge terms to let the UK Dairy trade just die out. Talk of low or no tariffs on food imports yet potentially very high ones on UK exports is like shooting ourselves in the foot. What happened to UK first? Willing to be corrected if I have the wrong end of the stick.

Certainly in the big supermarkets the price they pay for milk bares no correlation to what they sell it for on the shelf.
The money tends to be in brands, e.g Cathederal City, Lurpak and Cravendale.

 

[Only]

Meadow foods isn't one of them

 

[holywell farmer]

It's been on BBC news today

 

[Enry]

they don't move until next year

 

[Mr Mackay]

I was told 75 producers , and the biggest with 900 cows?? Thats £300,000 owed if fag packet calcs are done , and the odd one probably owed by Beeston too?

 

[Blue.]

A bit of time on company check shows a number of dairy processors a lot nearer the edge than is good for them

Grahams and Paynes spring to mind,both dismal.

 

[holstein654]

Grahams and Paynes spring to mind,bothl

Grahams and Paynes spring to mind,both dismal.

just looked on companies house???
Freshways lost 5 million
Muller lost 100 million in uk
Arla lost 38 million in U.K.

Not sure if I’m understanding the figures correctly