Falling cream prices behind Tomlinson’s Dairies closure

By Dan Colombini contact

- Last updated on GMT

Closure of the dairy has led to the loss of over 300 jobs
Closure of the dairy has led to the loss of over 300 jobs

Related tags: Finance, Milk, Dairy

PricewaterhouseCoopers (PwC) has confirmed that the “significant operating losses” caused by decreased cream prices caused the closure of Tomlinson’s Dairies, as hundreds of workers seek legal action against the business.

PwC has been named administrator after the business in Wales suddenly closed its doors on 14 October.

This resulted in the loss of 331 jobs at what was one of the UK’s largest dairy firms.

Despite some improvement in its trading performance of late, Tomlinson’s had suffered an accumulation of significant operating losses over recent years which were exacerbated by industry-wide issues, such as energy costs and a depressed cream price​,” a spokesman for PwC said.

No alternative​’

The directors unfortunately had no alternative but to place the company into administration. Our thoughts are with the employees affected and we have ensured a range of support measures are available to them at this difficult time​.”

PwC is now working closely with the Department for Work and Pensions in the Wrexham district to ensure employees are supported.

We have secured funding to enable the company to pay arrears of wages due prior to the appointment of administrators,” the spokesman added. “We are also working with the Insolvency Service and Redundancy Payments Service,to support with statutory payments that may be due to employees as a result of the administration​.”

Despite this, much of the former workforce has sought legal action against the firm, with the National Farmers’ Union of Wales and Unite the Union supporting staff going forward. According to the former, around 70 regional producers have been hit by the closure.

Law firm Simpson Millar has also confirmed that a number of former workers in the Shropshire area have also sought legal action.

NFU Cymru is working flat out to support its members affected by this issue. We have put together a briefing for NFU members, which is available on our website or from our Call First team​,” a spokesman said.

Legal Assistance Scheme

We will keep that briefing updated as new information becomes available. We have also set up a dedicated fund through our Legal Assistance Scheme, which affected Tomlinson​’s suppliers can access to get some free initial legal advice from one of our NFU legal panel firms.

“We have also already arranged a meeting so we can talk through the process face to face with those farmers affected.​”

Unite added: “This is a totally unexpected and devastating blow for the workforce and their families.  The workforce had no idea this was coming; they were simply told not to report for work on Monday morning, but to attend a meeting scheduled for 4pm.

“Unite will be offering maximum support to help those affected, both in terms of retraining and support in securing new employment. Unite will also be launching legal action on behalf of our members for compensation over a failure to consult.”

Tomlinson’s said that key customers, the company and its stakeholders had been in urgent communication over a package of measures to further support the company over recent weeks, but were unable to save the business.

News of the closure emerged earlier this month​. 2 Sisters Food Group subsequently offered up to 120 jobs at its Sandycroft plant in Deeside​ to affected workers.

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