Farmers quit dairy over pay row

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A mozzarella cheese plant is set to lose almost all its milk suppliers in a row over alleged late payments.

Fifty farmers have decided to cease supply immediately, while a further 50 have given dairy firm Dansco notice that they intend to quit next week.

The Farmers' Union of Wales (FUW) said it feared the company, which employs 130 staff in Newcastle Emlyn, Carmarthenshire, could now close.

Dansco, which has about 100 suppliers, said it would not go out of business.

There have been complaints since last April that the company has not been paying on time, and it acknowledged in a letter to the FUW last year that it had cash flow problems.

Farmers have since held meetings with local AMs and met countryside minister Carwyn Jones on Monday.

'Outstanding debts'

A spokesman for the Dansco Producers' Group said farmers felt they had no choice but to stop supplying the plant.

He said: "After a presentation by the new chief executive at Dansco Dairy Products Ltd the producers did not believe that the business was viable under the current ownership and management, and that full repayment of their outstanding debts and a resumption of payments according to their original supply contracts would be honoured."

A further 50 farmers have said they will cease supplying Dansco on 16 March.

Tamer Abou el-saod, chief executive of Dansco, said the firm would not go out of business, and said there was a lot of milk on the market.

He also denied jobs would be lost at the plant.

He confirmed that farmers had terminated their contracts, but added that the dairy had managed to collect milk from some of them on Tuesday morning.

FUW director Peter Davies said it was a serious blow to the confidence of the dairy industry, and feared for the future of the plant.