Farmer co-op and dairy producer organisation Dairy Crest Direct (DCD) is reorganising following Dairy Crest’s sale of its dairies business to Müller.
Since the sale was completed on 27 December 2015, DCD has separated into two organisations. DCD was the UK’s first dairy producer organisation (DPO), representing 1,020 farmers supplying 1.5 billion litres per year to Dairy Crest. It will continue to operate in an “evolved” form as DCD DPO, representing the 360 farmers in the south-west who supply Dairy Crest’s Davidstow Creamery in North Cornwall. This creamery produces Cathedral City cheddar and dematerialised whey powder for infant formula.
A new company, Direct Milk DPO Ltd, has been established to represent DCD members transferring from Dairy Crest to Müller. It will represent 660 farmers supplying more than a billion litres a year via standard liquid, liquid formula, organic and the aligned contracts for M&S, Sainsbury’s and Waitrose.
Dairy Crest Direct says the structures of both DCD and Direct Milk will continue to be run along existing lines, following principles of elected accountability, financial independence and, representing members across the supply chain. DCD’s 360 farmer members will elect eight “geographic specific” forum members to represent them, who in turn will elect three directors.
Direct Milk’s 660 farmer members will elect 15 “contract specific” forum members including M&S, Sainsbury’s, Waitrose, organics, standard liquid and liquid formula representatives. These representatives will elect three directors.
Both organisations are DPOs; a structure introduced by the European Parliament and the European Council in 2011 to enable dairy producers to organise and strengthen their position in the supply chain. DCD is expected to continue to operate as a co-operative. Direct Milk has yet to gain co-operative status.
David Herdman, former chairman of DCD, has become chairman of Direct Milk. Former DCD vice chairman Stephen Bone is chairman of DCD at Davidstow.
“We look forward to representing our members who will supply Müller through our new organisation Direct Milk DPO Ltd,” said Mr Herdman.
“DCD will continue its ongoing representation at Davidstow. The decision to evolve DCD was carefully considered by the DCD board and our wider DCD Forum, in order to provide continuity in representation through DCD Davidstow to Dairy Crest and Direct Milk to Müller.”
He added: “This evolution allows both groups to concentrate on the needs of their members in supplying two distinct milk processors. Our initial aim is to establish the best way to integrate Direct Milk within the new larger Müller milk business, whilst DCD continues to work closely with Dairy Crest and its unique product mix at Davidstow.
“It’s important that against the current unprecedented level of production and resulting pressure on dairy markets, that representation remains as effective as possible. I believe this transformation in our structures will assist with these goals.”