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Wiseman milks Co-op contract

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Published Date: 30 January 2009
By Hamish Rutherford
ROBERT Wiseman Dairies has won a contract to supply a further 172 stores for the Co-operative Group, a deal that will add about 15 million litres a year to the company's production.
Announcing that production in the 17 weeks to January 24 was 6.3 per cent up on a year earlier, Wiseman said it would extend its business with the Co-op from the start of March.

East Kilbride-based Wiseman has supplied Co-op stores in Scotland for many years and won a contract to provide milk for the company in the south-west of England last October, a deal that has now been extended.

The company also hinted that profits for the six months to the end of March could be higher than expected, after it cut the price paid to its farmers by 1p a litre. Wiseman said in November that the falling price of bulk cream meant its second half profits could be as much as £7 million lower than expected, but yesterday said the impact may be now lower than that.

A spokesman said Wiseman continued to pay its suppliers a premium rate compared with its major competitors.

Shares in Wiseman fell 7.75p to 328p.



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  • Last Updated: 29 January 2009 8:35 PM
  • Source: The Scotsman
  • Location: Edinburgh
  • Related Topics: Robert Wiseman
 
1

FarmerBob,

Edinburgh 30/01/2009 08:54:26
Point of fact - Wisemans cut their price to their farmers by 2.2p - one of the largest price cuts announced so far. It would be a positive move if their farmer suppliers were to benefit from this profits review.
2

RRF,

Northern Ireland 30/01/2009 10:24:34
The problem with that Farmerbob is that Wiseman's are a public company with shareholders to contend with, they are not a farmer or supplier owned co-op. If they were to do what you are suggesting, they would infact be subsidising their suppliers with the profits that are to be kept re-invested into the company for longer term growth and for re-distribution to the shareholders. The market rate for cream has fallen, and they have had to re-adjust the price they pay suppliers in line with this. They actually pay better prices than NI farmers get here. The problem with the whole UK industry is that although we produce below our offical quota, those quotas are actually too high. Only 50% of milk production in the mainland goes to liquid milk...in NI that figure is actually around 30%....this is far too low, and while production sits around these levels we will always have unacceptable exposure to world commodity markets. This issue needs to be addressed at government level....introduce a scheme under CAP as was done for Wine Producers to remove the over production....pay suppliers not to produce...and that means actually taking those animals out of overall production, not just passing them over to other expanding herds! The system is broke, and someone needs to take a few brave steps in trying to fix it!

 

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