UK – Nestle and UK co-operative First Milk said this week that a milk supply deal between the two organisations has exceeded expectations, with a good response from Nestle producers to First Milk’s offer of full membership.

The news comes after the partnership was announced in November for First Milk to supply Nestle’s milk requirements and for Nestle’s own producers to supply First Milk. This week, more than 400 of Nestle’s milk suppliers moved to First Milk.

Under the agreement, Nestle producers were offered the option of taking full membership of the First Milk co-operative or remaining on the existing Nestle contract. For producers taking the second option, First Milk has made a commitment not to vary the contract terms during the year to 31 March 2004.

More than 280 of the Nestle suppliers chose to join First Milk as of this week, a year ahead of the target date of 1 April 2004. This represents 65 per cent of the total number of Nestle contracts that could have been assigned.

The partnership became a reality this week, with Nestle producers supplying to First Milk which, in turn, has begun supplying all of Nestle’s raw milk requirements in the UK.

First Milk chief executive John Duncan said: “That a major processor has entered into a supply agreement with a co-operative is a major achievement for the co-operative philosophy.”