NFU Scotland has expressed its dismay at the collapse of merger negotiations between the UK’s two largest milk co-operatives, First Milk and Milk Link. The NFUS has criticised the failure of negotiations, describing the collapse as a huge letdown for the whole industry.

The boards of Milk Link and First Milk have agreed not to continue with the proposed merger of the two businesses.  In a joint statement the companies say: “Since October last year, there has been thorough due diligence and business planning activity. At the end of this process there were a number of important issues that we were unable to resolve including the valuation of the two businesses.

“Despite extensive discussions, it has not been possible to agree terms for a merger that either party felt they could recommend to their memberships at the present time.”

They add that both boards believe that strong farmer-owned dairy businesses are vital to the long-term future of the UK dairy industry, and will continue with their plans to grow and develop their respective businesses.

However, NFUS president Jim McLaren said: “For years we have talked about the need for consolidation and today a huge opportunity has been missed.

“I am not interested in hearing who is to blame for the talks collapsing, the fact is that a real chance to create a united rather than fragmented dairy sector has been blown, certainly in the immediate short-term.

“What is more frustrating is that, after a decade, we had finally got the competition authorities to back off. They have taken a really forward-thinking approach to this merger, giving the industry a chance to create a solid platform for the future. Members of both co-operatives will be demanding explanations as to why the best opportunity in a long time has been allowed to slip from our grasp.

“It is difficult to view today’s news as anything other than a huge let down. However, this time, the blame for lack of progress does not fall at the door of government or its competition authorities. This appears to be a failure very much of the industry’s own making.”