The Welsh Government has announced it will launch a ‘taskforce’ to support around 330 members of staff affected by the closure of Wrexham firm Tomlinsons Dairies.
PwC confirmed today (October 15) that it had been appointed as administrators for the firm.
Tomlinsons Dairies was one of the UK’s largest dairy companies, processing and packaging Welsh, British and Organic milk and dairy products to multiple sectors across the market.
Over the past three years, it doubled the size of its Minera dairy, added a distribution hub at Ruabon, and increased its processing capacity to more than 200 million litres.
It’s understood the company experienced significant cash flow pressures with increased energy costs and low commodity cream prices in the dairy industry blamed for its recent poor trading results.
As a result, the company was placed into administration, with the redundancy of all employees, except for a small number who will be retained for a short period.
A spokeswoman for the administrators said: “Despite some improvement in its trading performance of late, Tomlinsons had suffered an accumulation of significant operating losses over recent years which were exacerbated by industry-wide issues such as energy costs and a depressed cream price.
The directors, unfortunately, had no alternative but to place the company into administration. Our thoughts are with the employees affected and we have ensured a range of support measures are available to them at this difficult time.
A spokesman for Tomlinsons Dairies added: “The family shareholders, directors and management of Tomlinsons are devastated by the administration and sincerely regret its impact on their customers, suppliers, farmers and employees.
“Key customers, the company and its stakeholders had been in urgent communication over a package of measures to further support the business over recent weeks given the deterioration in Tomlinsons’ financial position.
Strenuous efforts were made to try and find a solution but on Friday evening the position proved untenable.
“Consequently, the directors had no alternative but to make urgent plans to both cease milk processing and file for administration.
“The decision, taken over the weekend, was time-critical to stop milk being delivered that could not be paid for once the prospects of a rescue were known.”
Government support
The Welsh Government had supported the company around trade negotiations with the business and its stakeholders and had also provided assistance with the sale of an onsite packaging company to support the stability of the overall business.
It had also worked closely with the Development Bank of Wales by introducing additional support through turnaround restructure options.
A Welsh Government spokesman said the news was “very disappointing”.
“We have worked closely with Tomlinson’s Dairies during the past 18 months to try and help them resolve their ongoing business issues,” he said.
We have now established a task force to work directly with the staff affected by the closure and are in discussions with farming unions and other stakeholders to consider what support is required at this difficult time.
