The Campbeltown Creamery was put up for sale in April 2018, when First Milk announced that it was not core to its business strategy for the future.
Despite significant efforts over the past 18 months, it had not been possible to conclude the sale of the business, said First Milk.
After a sale to a third party fell through, local farmers launched their own plan to take over the creamery. However, despite trying to formulate a plan to take the business forward, alongside advisers and the Scottish Government, the attempts to save the business failed.
“We are disappointed that it has not been possible to conclude a sale of Campbeltown Creamery,”said First Milk chief executive Shelagh Hancock.
“We fully appreciate that this decision has significant consequences for colleagues at the creamery and the local community, but it is important that we act in the best interest of the wider business and our farmer members and continue with the solid progress we have made in strengthening and developing First Milk.
“We regret the impact this decision will have on our colleagues and are committed to treating those affected fairly and with consideration during this difficult time.
“Throughout the last 18 months we have been in regular dialogue with our local members on Kintyre about the future of the site. Nothing will change in respect to their co-operative membership of First Milk, and we will continue to collect and pay for their milk on the same basis as before going forward.”
John Smith, dairy chairman of the National Farmers Union of Scotland and local Kintyre dairy farmer, added: “My heart goes out to all the staff that work at the creamery and it is regrettable that the Mull of Kintyre brand that we have passionately supported will now no longer be available.
“That is due to the harsh, economic reality of processing milk in an incredibly tough dairy industry that has witnessed so many casualties at both farm and processing level in recent times.
“Whilst this is very disappointing news, it is reassuring that all of the local farmers are members of First Milk and will continue to benefit from being part of a national co-operative with an evergreen contract and continuing to have their milk collected in the future.”