Farmers lose Muller deals for producing too much milk
Muller says there's not enough demand to keep contracts with 14 north-east dairy farmers.
Milk firm Muller has announced that 14 dairy farmers in north-east Scotland will have their contracts terminated.
It said there had been an "unprecedented surge" in milk production, but not enough demand.
The farmers will now be given 12 months' notice that their contracts will not be renewed.
The company said its 230 Scottish dairy farmers had collectively increased production since 2014 by the equivalent of 33 litres a year for every person in Scotland.
Dairy farmers in other parts of the country that supply Muller will, from February next year, also face a transport levy as extra milk is taken from Scotland to England.
Rob Hutchison, milk supply director for Müller Milk and Ingredients, said: "We fully appreciate that these measures will be extremely unwelcome and destabilising for our farmer suppliers particularly in the north east of Scotland, but the current situation is unviable and we must act.
"We completed the largest single investment in fresh milk processing in Scotland in more than a decade at our dairy in Bellshill last year and we will continue to do what we can to stimulate new demand for fresh milk.
"But with fresh milk already in 96% of the nation's fridges and overall consumer demand for the product in marginal decline, the reality is that it is extremely unlikely that this sector will soak up the heightened levels of milk production from farms which we have seen.
"Our farm services team will now work closely with affected dairy farmers and we will do everything in our power to help them adjust to the changes which we must now make."