Medina (Dairy) lose 27 million litres as High Court rules against them in another David & Goliath Court Case

Posted on: 08/10/20

In what is a Landmark case Medina/Watsons Dairy lost in the High Court this Tuesday as the Judge concluded that their High Court Injunction to force 16 Meadow Milk farmers to continue to supply all their milk to Medina for a further 9 months amounted to a restriction of trade.

The Judge was allegedly very clear on this point in addition to the fact that the farmers milk was not unique with alternative supplies available on the spot market and elsewhere.

In addition, he was clearly unimpressed with Medina’s confirmation that two of the Meadow Milk producers, who were not part of the injunction, had signed new contracts with Medina involving 8 million litres on better terms that the 16 were on. As commented, it was hardly surprising the 16 farmers were keen to leave Medina when improved terms were on offer to two of its group members.

The Judge noted that during the preceding 3 months, since the farmers gave notice to Medina, the processor had failed to demonstrate they had attempted to source 27 million litres of replacement milk Consequently the farmers could not be held to the contract section Medina wanted the court to rely on and the injunction was quashed.

The 13 Meadow Fresh farmers are now supplying Meadow Foods (note no connection with Meadow Fresh) with 25 million litres three others having moved to two other processors.

The Judge awarded costs against Medina and provisional estimates indicate total costs in excess of £200,000 and potentially £250,000 will be faced by Medina which equate to around 1ppl for the lost litres. So round 1 score was Clark Willmott (Meadow Fresh Lawyers) 1 - Burges Salmon (Medina Lawyers) 0.

That leaves Medina wounded and having to immediately replace a whopping 74,000 litres of milk/day effectively on the spot market which was pre this judgement trading around 100,000 litres day. That’s assuming Medina don’t buy the same milk from Meadow Foods at a Premium which almost seems inevitable!! In court last week Medina allegedly claimed without the 25 million litres they would fold within 72 hours. That seems unlikely given the evidence they presented in court. 

So what next?

It is inevitable the judgement will influence the actions of any milk processor who believes they can serve an injunction to force farmers to supply it with milk. 

Going forward, Medina could return to court for round 2 to determine whether the 16 Meadow Milk producers serving 3 months notice instead of 12 was valid. 

Such a challenge is likely to be exactly what the NFU and a large number of Dairy Farmers want and will have them licking their lips. 

If successful, the 16 farmers would face a damages claim for the additional money Medina/Watsons need to pay for replacement milk for the next 9 month. 

However, if it fails it will be a once and for all judgement which would be a boost to the NFU’s campaign for contract reform. There is even the option for round 2 to be a claim for damages against Medina from 16 farmers which in itself would be another unique opportunity. 

It is a crying shame it’s come to a head in this way. The NFU, in particular Minette Batters are to be applauded for stepping forward and financially backing the 16 farmers and having won and had costs awarded it will hopefully encourage the NFU to step forward in similar cases going forward as well as encourage farmers to have the confidence to come together and fight for what they feel is contractually right. Medina were fairly vocal in their complete confidence they would succeed with the injunction right up until Tuesdays judgement. 

Credit should also go to Jon Proctor, Chairman of Meadow Milk, who only started farming in his own right 4 years ago when he took on a County Council farm. He has driven this bus and is a key cog in the farmer’s victory.

Regrettably Judges remit did not address the contractual issues and its perceived failures which resulted in the Meadow Fresh farmers serving notice not aired or decided neither was the allegation that the Medina farmers were exploited. Neither was judgement passed on Medina’s forced extended payment terms effectively using the farmers as its bankers. Fourteen months on Medina are evidently still paying the farmers later than contractually agreed.