EAST of England Co-op, the UK’s third biggest independent society, has announced plans to end its milk processing and distribution business.
The society is in discussions with Dairy Crest that are likely to lead to the sale of the co-op’s entire dairy distribution business next month, for an undisclosed sum, and the closure of its Ipswich processing dairy in early March.
A review of the business had underlined the need for significant capital expenditure on maintaining and upgrading the processing dairy at Boss Hall, Ipswich.
This, together with uncertainty concerning milk supply, declining demand and high levels of price volatility, has led the society to conclude that dairy operations offer insufficient long-term viability at a local level.
Under a TUPE Agreement over 300 employees in Norfolk, Suffolk and Essex will transfer to Dairy Crest. However, the closure of the processing dairy in Ipswich will result in the loss of up to 58 jobs.
East of England say that a priority concern during the negotiations with the prospective purchaser has been a wish to ensure that as many employees as possible are able to transfer to the new owners and that customer service is maintained on an ongoing basis.
Richard Samson, East of England Chief Executive, told the News: “This was a difficult decision for a society that has been an important player in the local dairy scene for many years.
“Sadly, the market has changed considerably and it is clear that the future lies with large-scale national operators with facilities to meet the increasingly varied and specialist needs of consumers.
“In recent years, we have been the only major UK co-op to retain dairy operations, but the time has come to concentrate our efforts in other areas of our business.”
He added: “Dairy Crest is a well-respected national operator and we are confident that our dedicated and skilled workforce will be an asset to them.”
If the sale goes ahead, customers can expect a seamless transfer of service. Doorstep deliveries will continue to all existing customers and milk producers who currently supply the society, including many local farmers, should also experience a smooth handover.
Dairy Crest has had a substantial presence in East Anglia for many years and operates a large processing dairy within the region.
East of England Co-op has confirmed that its £40 million development programme in the region will continue and says that further acquisitions, extensions and refurbishments are planned, with a major extension to the food store at Elmswell, Suffolk, currently underway.