Midlands jobs threatened as dairy closes

UP TO 330 jobs could go at the Birmingham plant of the UK's largest regional dairy business while around 60 more could be at risk at other depots, thanks to the likely sale of the factory.

The plant looked set to be sold after its Co-operative owner said it lacked the firepower to compete with bigger rivals. Midlands Co-operative Society (MCS) has agreed to a deal with St Ivel Gold group Dairy Crest in a move that is expected to put nearly 400 jobs at risk.

It said it had 'reluctantly' decided to sell the arm after facing an 'extremely competitive market' and the cost of upgrading its main Birmingham processing plant, which dates back to the 1900s. The operation processes more than half a million pints of milk a day, making daily deliveries to more than 6,000 retailers and home deliveries to 125,000 households a year.

MCS said the deal - for an undisclosed sum - was likely to be completed later this month. Dairy Crest said in a statement that it was in 'advanced discussions' with the company.

A total of 730 staff are employed by the MCS milk operation, which includes 16 smaller depots as well as its main plant. It is thought the other 60 jobs would go at sites involved in doorstep delivery, a sector that has been in decline in recent years.

It comes just weeks after the collapse of MG Rover, which saw the loss of around 60 jobs in the Midlands.

MCS said the business had come up against bigger rivals whose operations were highly automated and had benefited from significant investment. The Birmingham plant had been a 'major problem' since it required major investment to keep it running. The cost of building a new processing plant was estimated at £25m.

Dairy Crest is expected to transfer milk production from Birmingham to its existing facilities, which include a plant in Fenstanton, Cambridgeshire and one in Stonehouse, Gloucestershire.

The company hopes to continue using supplies from 285 farms in the Birmingham area that currently provide MCS's milk. Dairy Crest whose other products include Country Life butter, Cathedral City cheese and Utterly Butterly, produces around 1.25bn litres of milk a year. It employs around 5,000 people across its milk processing and delivery business.

Around 15% of total business comes from its doorstep delivery arm and it has embarked on a strategy in recent years to buy up smaller home delivery firms.