Criticism over the prices UK dairy co-op First Milk was paying its suppliers was a key reason for chief executive Peter Humphreys’ decision to leave the business, just-food can reveal.
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First Milk announced this morning (4 December) that Humphreys (pictured) will leave the business after five years as chief executive in March.
To some industry watchers, the announcement was a surprise, with Bill Mustoe, who only joined First Milk as chairman in October, to take immediate control of the company’s executive functions.
In a statement, Humphreys alluded to a “new phase” First Milk “is moving to” and said it was “appropriate” that he stepped down from his role.
First Milk is looking to improve branded sales, which accounted for 5% of the company’s turnover in its last fiscal year. The group wants to up that portion to 20% this year and last month cut its stake in Robert Wiseman Dairies to raise cash for investment in its cheese business.
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By GlobalDataHowever, a First Milk spokesman dismissed any notion of a rift between Humphreys and Mustoe, insisting that both men had a “good relationship” and agreed on the co-operative’s moves to invest more behind its branded business.
The spokesman told just-food that, amid criticism from some First Milk suppliers over the prices the co-op was paying to farmers, Humphreys thought it was the right time to move on.
“It’s more to do with the fact that the milk price is not at a great place right now and, because of that, there has been quite a lot of criticism from members,” the spokesman said. “People like to focus on key people in the organisation and [Humphreys] had quite a bit of criticism.”
The spokesman added that, with a new chairman coming in, Humphreys felt it was an appropriate time to leave the business. “He decided five years was a decent stint as chief executive,” the spokesman said.
First Milk’s decision to reduce its November standard price for milk to 21.4 pence per litre attracted flak from farmers.
When the cut was announced, the National Farmers Union in Scotland said it was “stunned and dismayed” by the move.
“While most milk purchasers continue to dither, this First Milk announcement of a price cut comes as a real blow,” president Jim McLaren said.
“The market fundamentals are all pointing to significantly better prices for milk and dairy products and we are demanding that milk processors quickly share improving returns with those who supply them with milk,” he added.
