Freshways Suppliers vent their anger over major contract change

The Nijjar family yesterday demonstrated how little its Directors feel any necessity to engage with its supplying farmers having given them all five weeks bombshell notice of a significant price drop and contract change.

Ian calls it the Arla factor because Arla’s 5 months standard liquid litre price of  29.06ppl and its inclusion in the Freshways basket price is “now making us (Freshways) even more uncompetitive” as commented by MD Bali Nijjar in his letter to producers this week.

Freshways have operated a transparent basket price featuring five liquid processors for 16 years (since 2003) which now include Arla, Muller Meadow,  Paynes & Yew Tree. However now the Arla price doesn’t suit Freshways and in a letter to producers state “Their (Arlas) June price of 29.06ppl is substantially higher than the remaining 4 in the basket who average 26.6ppl.”

Result is after 16 years Freshways have given just over 1 months notice that its contract pricing terms will be unilaterally changed and the basket price will be ditched to be replaced with a Freshways schedule which simply translates to a significant price cut.

To say this has come as a complete bombshell is an under statement especially given the fact several Freshways Farmers suppliers claim their farmer representatives were not consulted and the change was imposed.

If correct Freshways are playing a very dangerous game because the change is coming at a time when total GB output is heading towards “normal” and futures prices and market sentiment is cautiously looking towards at least stability in milk prices if not some small increases. In other words the change is short notice and well behind market movements.

It’s a long time since so many farmers vented their anger at Ian as much as Freshways suppliers have in the past 24 hours.

To summarise these Freshways farmers do not feel Freshways have been fair and to change a pricing mechanism which has operated for 16 years at a months notice with zero consultation has been interpreted that Freshways can steam roller any changes they wish and “stick two fingers up to producers.”

Back in January in Ians Dairy Farmer Article he wrote “I agree there have been a small handful of milk purchasers who have crossed the line with unacceptable behaviour.” And that “such practices have to be stamped out.”

Michael Oakes, NFU Dairy Board chairman stated “milk purchasers cant be trusted to deliver fair contract terms and continue to use and abuse farmers.”

As a generalisation applied to UK milk purchasers Ian disagreed with Oakes but understands why Freshways suppliers are furious and feel both Michael Oakes and Ians comments now apply to Freshways.

Several Freshways farmers are threatening to walk on the basis if the contract terms can be changed to drop their milk price in a months time they should be able to leave on the 28^th July or after.

For these farmers any Trust has evaporated over night and I guess voting with their feet is the only way their anger will be registered.

Whilst Muller have project Darwin Freshways perhaps need project Thunderbird because for sure International Rescue is needed to improve its relationship and communication with its suppliers.