Dairy profits hit by milkmen payout

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GUERNSEY Dairy profits are predicted to be down by tens of thousands of pounds under a new distribution system, which was designed to make its operation more efficient.

In 2015, the States voted to allow the Dairy to deal directly with commercial customers, such as supermarkets, and, as a result, a year later agreed on a £750,000 mitigation package for milkmen, which came directly from the Dairy's coffers.

Not a single shop, however, has taken the chance to deal with the Dairy directly and it still has the same number of customers, 20.

There also appears to be no competition in prices to benefit the consumer. A survey done yesterday showed that milk was priced at £1.18 for a litre in supermarkets and small shops.

Profits for 2017 are projected to be £41,000, compared to £133,000 in 2015, when milk rounds were licensed and offered exclusivity.

A States' Trading Assets spokesperson said the surplus was affected by both changes to yearly income and ongoing or one-off costs.

'The reduction in the 2017 budget reflects a number of such items,' it said.

'For example, the States has resolved to reduce the dairy farm management payment by £1m. over five years, and that annual reduction is being absorbed by Guernsey Dairy. That is an external factor.

'On the expenditure side, some additional costs have been budgeted for depreciation on capital investment that is being made to improve operational efficiencies. The benefits of that will be seen longer term.'

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