Sainsbury Tender triggers several farmers fury from those put on a Bosman from Muller to Tomlinson’s

Sainsbury’s held its third Dairy Development Group (SDDG) aligned farmer meeting near Knutsford, Cheshire yesterday (18th) and unlike the previous two SDDG meetings this week it was far from plain sailing with one side of the room having smiley faces and the other side red steaming faces as blood pressure rose. 

The free movement/transfer of SDDG farmers is the big bone of contention especially those in Cheshire who from 1st October 2020 will cease to be Muller SDDG producers and move on the dairy equivalent of a free Bosman transfer to Tomlinson’s Dairy in Wrexham, Wales.

These farmers didn’t hold back and aired their concerns and worries over the free transfer and their fears over the finances.  The end result was an agreement for those concerned farmers to have two further area meetings next week involving Tomlinson’s to discuss the farmers very business like and reasonable request that Sainsbury’s guarantee their milk payments in the event Tomlinson’s business is completely derailed.

In reality Sainsbury’s simply cannot stand by and allow Tomlinson’s to head downhill. Recently progress appears to have been made to turn the fortunes of Tomlinson’s around  from its low point around 18 months ago following Tomlinson’s first experience  in processing Sainsbury’s milk which lets say didn’t go according to plan.

However along came the appointment of Stephen Oldfield, who has been previously nicknamed the GB dairy undertaker having been involved with several dairy receiverships including DFOB. On this occasion he is more of a magician working hard to turn the business around and playing match maker trying to marry or continue the 3 year relationship between  Sainsbury’s  and Tomlinson’s rather than organising a funeral as was first feared.

Sainsbury’s won’t be able to say to the farmers it’s nothing to do with us if Tomlinson’s fail because the PR outfall will be unimaginable. Incidentally Ian thinks it is highly unlikely Sainsbury’s would allow it to happen during the rumoured 3 year Tomlinson’s contract extension until 2023.

If next weeks meetings in Cheshire and Skegness result in Sainsbury’s providing guarantees to the farmers all should be well.  If not it will be interesting to watch how many affected farmers explore other outlets including the possibility of a Muller direct contract, if available which might not be automatic.

Its likely common sense will prevail and all 53 farmers who are been told they are moving will run with it.  It’s a postcode lottery over which the farmers have no control or say and one wonders how the Industry has reached this bizarre situation.

Those moving from Tomlinson’s to Muller were smiling yesterday the others going the other way concerned but at the end of the day the likelihood is few  will give up the 4ppl premium the SDDG contract currently delivers over some alternatives. Some will not be happy but a 4ppl price drop is a tough pill to swallow in this environment.

One final interesting move is the hauling of only six farmer’s milk from Skegness to Tomlinson’s a round trip of over 400 miles which for the fastest route passes Arla Leeds and Muller Manchester processing plants.  The total transport cost is likely to be at circa 4ppl especially given it has to be packed and transported back to regional depots and stores in the area.  That’s a serious cost and does nothing to reduce Sainsbury’s environmental footprint. So long as its Sainsbury’s footing the bill Tomlinson’s and the farmers won’t be too concerned.