Suppliers left adrift by Titanic sinking of DFB

Jun 13 2009 by Karen Dent, The Journal

As the crisis at collapsed dairy co-operative Dairy Farmers of Britain (DFB) reached its peak, Northumberland-based industry expert Bruce Jobson offers his perspective on what went wrong.

When challenged on this issue, the chairman of DFB Members Council is quoted as saying the situation could have been much worse and DFB could have taken supplies without payment until June 15 (when farmers receive their previous month’s milk cheques) rather than invite PwC as receivers on June 3. Oh, how grateful unpaid farmers must feel, but such arrogance is beyond contempt.

DFB has been on a Titanic course for a considerable period of time. Long-term criticism has been levelled at the company for being inefficient and unable to compete in the marketplace.

The first imminent signs of impending disaster occurred in November 2008 following the resignation of the then chairman and the announcement of a 2p per litre price cut. This was followed by a further price cut in February and DFB inviting PWC to find a new buyer – the equivalent of manning the company lifeboats.

DFB chief executive Andrew Cooksey resigned his position at the helm in April and a further 2.2p milk price cut was announced. Worse was to follow with the announcement DFB had lost the contract to supply liquid milk to the Co-op. The distress signals appear to have been ignored and the deckchairs were being shuffled.

The company was holed below the waterline and must have been rapidly sinking, but steadfastly, the band played on throughout May to a series of reassuring tunes.

During the past week 1,000 DFB members have since gone overboard and signed rescue contracts with other passing dairy companies. Small producers and those in outlying areas may not be as fortunate and may not be able to secure survival.