Tomlinsons Dairies: 'Wages cash secured' after dairy firm shuts down

Image caption, Despite improved sales, the dairy was struggling with mounting losses, administrators said

22 October 2019

Cash to pay outstanding wages for staff at a failed diary firm has been secured, administrators have said.

Tomlinsons Dairies in Wrexham went into administration on 15 October, with the loss of 331 jobs.

Administrator PwC said is was also working with the official UK bodies responsible for arranging statutory redundancy payments.

However, farmers who dealt with the firm are still owed thousands of pounds for milk.

PwC said they were now putting together claims for outstanding payments.

Image caption, Wrexham farmer Les Morris is one of those waiting for outstanding milk payments

Tomlinsons, which was set-up 36 years ago, had grown to become one the of UK's largest dairy, processing and packaging firms, with a 200 million litre milk capacity at its sites.

Despite improved trading in recent months, the company had suffered mounting operating losses over recent years, PwC said.

There were also increased energy costs and a fall in the price cream demanded.

"The directors unfortunately had no alternative but to place the company into administration," the firm added.

Wrexham dairy farmer Les Morris said he had managed to find another milk processor but was still out of pocket.

"It's £12,400 for September and around another £6,000 for the first couple of weeks of October. There's a lot of forms to fill in," he said.

Cheshire farmer Dale Whalley said he was due £57,000 in payments, as one of 34 farmers who processed milk through Tomlinsons for the Sainsbury's Development Group, which exclusively supplied the grocery firm's supermarkets.

Crisis fund

But the farmer, from Knutsford, has been told Sainsbury's is not legally obliged to meet the payment.

A spokesman for Sainsbury's explained the contract farmers had had was with Tomlinsons and the contract Sainsbury's had was with Tomlinsons.

He said: "We understand this is a difficult situation for farmers and we are taking steps to support them. We found an alternative provider to process milk so that milk collections continue as normal."

The supermarket giant said it was continuing to talk to the Welsh Government, PcW and to farmers about the situation.

Farmers who are experiencing hardship as a result of Tomlinsons collapse are being offered help by a charity aimed at agricultural workers.

The Royal Agricultural Benevolent Institution said it would release emergency grants of up to £3,000 from its crisis fund to affected farmers.