Dairy farmers owed £1.6m unlikely to be repaid

Cheesemakers are struggling to make a profit worldwide, an expert says

Dozens of dairy farmers owed a total of £1.6m are unlikely to be repaid, the co-founder of a failed cheese plant has said.

The £20m Mona Island Dairy opened at Gwalchmai, Anglesey, in 2022, employing 51 people making Welsh and continental cheeses with milk from the area.

The owners confirmed it had gone into administration on Monday, adding there was only a “very small” chance their suppliers would be paid.

One farmers said he was owned more than £100,000.

Joint administrators Anthony Collier and Phil Reynolds of FRP Advisory were appointed on 7 June and said they were "exploring options" and would be in contact with all known creditors "in due course".

Ronald Akkerman, the dairy’s chief executive and co-founder, said administrators have two large, secured creditors so "the likelihood of any distribution to unsecured creditors is very small".

He added that plans were under way for a "rescue plan" with the aim being "an offer to farmers for full settlement, conditions to be confirmed".

He said about £1.6m was still owed to farmers for three weeks of milk supply, adding: "We will do whatever is in our power to take the business out of administration and back into operation."

Dairy farmer Peter Lewis says not being paid for milk meant he was struggling to pay his bills

One supplier, Peter Lewis, said his farm in Llanfyllin, Powys, was owed £71,000 and is "quite concerned" he could only get 1p in the pound in a couple of years.

He said he was now facing having to pay bills from his feed suppliers and it was "difficult to find the money".

He added that some suppliers were worse off than him and were owed amounts "in the six figures".

Mona Dairy described itself as "a new generation of cheese production business" when it opened and got a £3m Welsh government grant to help build a new factory.

Since going into administration, it slashed the number of employees from 51 to 24.

The Welsh government said a grant recovery process was being followed.

Richard Davies – a dairy industry expert said – the administration was "shocking" and a "massive blow” for Anglesey.

The Mona Island Dairy cheese plant opened in 2022

He said it was a challenging time for cheesemakers, with poor returns worldwide.

"The people that are investing are… the small family firms and the farmer-owned cooperatives," he said.

"So the challenges for that industry are huge - it is not that profitable, so therefore they have to be very good operators to be able to compete and live in that world."

The Welsh government said: "We are in contact with the company to see how we can support them and their workforce through this process.

"The welfare of farmers is a priority and farming unions are working with their members to ensure farmers have the necessary support available at this time."