A group of 70 producers in Gloucestershire and along the M4 corridor - known as the Selkley Vale Group - have agreed to switch around 80 million litres of milk from Dairy Crest from October 2007. They were the last producer group to join Dairy Crest and were known to be reluctant to lose their independence.
Dairy Farmers of Britain is the main co-op supplier into the factory, which makes the crumb used in chocolate bars like Dairy Milk. The co-op had served the factory well, according to a Cadbury spokesman.
The switch is an effort to make milk supplies more secure and move away
from a single source. It was not based on price, added the spokesman.
Cadbury insists that it still values its trading
relationship with the
co-ops, who will continue to supply 60% of the 200 million litres required by the factory each year.
Dairy Crest's milk supply director Arthur Reeves said: "I'm disappointed with the move because we have worked hard to build up direct suppliers into Cadbury. It is likely that we'll start to recruit to replace the lost volume."
But Dairy Crest could find this more difficult, following the recent sale of
the Aspatria and Haver-fordwest cheese factories to First Milk.
Many Dairy Crest Direct members and farmers think DC's strategy is to divest itself of all of its factories and farmer responsibilities in favour of becoming purely a dairy brand-owning business.
However, Dairy Crest vehemently denies this is the case.
Cadbury is believed to be the last major milk buyer to move away from an exclusive co-op supply relationship to dealing directly.