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AFMP announces that its roadmap discussions are on track and moves to Code of Best Practice’s ‘purchaser discretion’ contract mechanism

Press Release   •   Jun 21, 2013 09:02 BST

Arla Foods Milk Partnership confirms its discussions on defining the roadmap to full membership of Arla Foods amba are on track and its continued commitment to the dairy industry’s Voluntary Code of Best Practice on Contractual Relationships. As part of that, from 1 July 2013, AFMP will move to the ‘purchaser discretion’ contract mechanism of the Code.

When the Voluntary Code was agreed in September 2012, AFMP was categorised as ‘a non co-operative with groups of producers in transition to full cooperative membership’ in acknowledgement of the discussions taking place with Arla Foods amba to enable AFMP members to become full members of the global cooperative.

At this time the AFMP board committed to adopting the ‘purchaser discretion’ contract mechanism if, by 1 July 2013, the route to full cooperative membership was still in the process of being clarified.

Jonathan Ovens, chairman of AFMP, commented: “Our discussions on the roadmap are progressing well and the AFMP board, the Arla Foods amba board of directors and Arla's management team, which are working together to define the roadmap, are happy with the direction and speed in which the discussions are going. I am confident of being able to present proposals to our members in the autumn.

“We have honoured the pledge we made to members last September in adopting the ‘purchaser discretion’ contract mechanism. We believe it demonstrates our confidence in reaching a successful conclusion to the roadmap discussions and that it is the right course of action for our farmer members and the industry as a whole.”

 

Notes to editors

Arla Foods

Arla Foods amba is the world’s sixth largest dairy company and a 100 per cent farmer owned cooperative. It has 12,400 European dairy farmers, 1,600 of which are British, following the merger with Milk Link. Over 90 per cent of the farmers that supply milk to Arla in the UK own or have a stake in our business. As a cooperative, Arla’s strategy is founded upon delivering for our farmers and we have a 100-year strong track record of cooperative success.

 

AFMP

The 1,300 members of Arla Foods Milk Partnership (AFMP) own 3.15 per cent of Arla Foods UK via their investment vehicle, Milk Partnership Limited (MPL), in a joint venture with Arla Foods amba. Since January 2012 AFMP increased its investment to 0.5 pence per litre per annum.

 

The roadmap

AFMP members have long sought to become full owners of Arla Foods amba and Arla Foods amba has always shared their ambition as the merger with Milk Link in October 2012 demonstrates. The process of defining and agreeing the criteria and roadmap for AFMP/MPL to achieve full membership of Arla Foods amba began in the autumn of 2012. Members have a choice to continue on the road to amba membership, in a way that is acceptable to members and Arla Foods amba, or take a direct supply contract with Arla in place of their existing contract.

 


Arla Foods UK plc is home to some of the UK’s leading dairy brands including Cravendale, Lurpak, Castello and Anchor. Processing approximately 3.2 billion litres of milk a year and with a turnover of approximatey £2bn Arla is the UK’s largest dairy company.

Over 4,000 daily deliveries are made to stores and regional distribution centres nationwide, Arla's brands can be found across the dairy category and the company has a 26 per cent share of the GB milk pool. Behind this leading business is a team of circa 4,000 people across the UK located at our dairies, distribution centres and head office.