A subsidiary of the Irish Dairy Board is to take over the cutting, packing and marketing of cheeses produced by farmers’ co-operative First Milk.
The speculated deal was finally confirmed yesterday by the co-op and Adams Foods. They both said it was about creating a long term strategic partnership.
Paisley-based First Milk said the move would allow it to concentrate its activities on opening up new export markets for its English and Welsh cheeses as well as its award-winning speciality Mull of Kintyre and Scottish Pride cheddar brands produced from its creameries in Campbeltown and Torrylinn on Arran.
Chief executive Kate Allum said the partnership would free up First Milk to focus more of its time and resources on priority growth areas – brand development, lifestyle nutrition, food service and exports. But those in the dairy trade viewed it as First Milk pressing the panic button after it losing a significant cheese supply contract with Asda.
The loss of that deal from April has already forced the co-op into proposing the closure of its own cheese-packing plant at Maelor, near Wrexham, where 231 jobs are under threat as the site is deemed no longer economically viable.
A trade source said the outsourcing by First Milk to an Irish-owned rival raised questions about its place in the UK market.
But farming union sources were not so negative, adding that if Adams now had 50,000 tonnes of British-produced cheese to sell it meant the equivalent volume from Ireland would no longer be arriving in the UK.
Adams will use its base at Leek, Staffordshire, to process First Milk’s hard cheeses, including branded cheddars produced by its Lake District and Haverfordwest creameries where the partnership will be making a significant additional investment to improve operations.
Adams is taking charge of the sales and marketing of First Milk’s cheeses to UK retail, food service and wholesale customers.
Both sides said the deal was good news as it created an integrated supply chain for the UK hard cheese market, which would guarantee a secure supply of quality British and Irish product. Adams already works with British cheese makers Parkham Farms and South Caernarfon Creameries.
First Milk would receive a “competitive price” for its cheeses, a statement said.
Adams Foods chief executive Ian Toal said the deal would help it achieve its vision of becoming one of the UK’s main suppliers of cheese and take its turnover to in excess of £500million. “It demonstrates our continued commitment to supporting the British cheese market and to meeting the needs of our growing customer base.”