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Thursday, October 17, 2019

AM expresses concern over milk sector

Following this week’s news that Wrexham-based dairy firm Tomlinsons has gone into administration, North Wales Assembly Member Mark Isherwood (pictured) questioned the Welsh Government yesterday over what action it is taking to protect the milk processing sector.

Administrators were appointed after the company, which was established in 1983 and employed more than 300 workers, experienced "significant cash flow pressures." 

As well as its base in Minera, Wrexham, the dairy company has operations in Chester, Shropshire and across the North West.

During yesterday’s Topical Questions in the Welsh Parliament, Mr Isherwood expressed concern regarding the closure and, with it being the second milk processing plant in Wales to close, asked what action the Welsh Government is taking to protect the sector.

He said: “Five million, I believe, of the £22 million investment in Tomlinsons in 2017 came from the Welsh Government, and, of course, that raises questions about the degree of contractual protection for the public pound. 

"But, as we heard, this is the second milk processing plant in Wales to close, meaning that more than half of (Welsh) milk production is now having to be transported elsewhere. The Dairy Leadership Board last met four years ago, but its conclusions still stand, including the need to attract top-end processors into Wales.

“Wales is a top milk producer. Across the European continent and beyond, milk production is moving north and west because grass grows better here. How, therefore, are you, or have you, since that recommendation from the Dairy Leadership Board four years ago, taken the actions necessary to develop and protect the processing sector in Wales, not only in terms of milk, but also in maximising the commercial opportunity to develop the components of Welsh milk, which offer exciting chances to deliver rural economic growth in the future, and marketing that to new potential owners, as you seek someone who will take it on as a growing concern?”

In his response the Deputy Minister for Economy and Transport, Lee Waters AM, said: “The £5 million grant was for a specific scheme to help them develop and become more resilient, and the food business investment grant, which was carried out in line with due diligence and all the grant conditions were discharged - the additional support was from the Development Bank for Wales, which was to help them with cash flow and other matters, and, clearly, along with the commercial investors, we have not been able to secure the full repayment of that. But if we can be accused of anything, it's certainly not of not offering enough support to the company.

“But there are things that we can't control. The markets are at play here, and commercial, individual companies make decisions, management make decisions, and there are consequences to those decisions. We remain confident that there is a good business to be run here, and we hope the administrators are successful in providing alternative providers. We'll work with them to continue supporting them. On the broader points that the gentleman makes about support for the industry, I'll ask my colleague Lesley Griffiths to write to him to provide a detailed response.”

Speaking outside the Chamber, Mr Isherwood responded: “The technology on the site is excellent. With over 300 employees directly affected, plus many more in the local economy, the investment here must not be lost and priority must be given to seeking someone who will take on the plant as a going concern."

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