Government u-turn puts Guernsey Dairy on shaky ground

Friday 25 June 2021

Urgent investment into the Guernsey Dairy is set to be delayed indefinitely, following the publication of the Government Work Plan, leaving the future of the Dairy in unknown territory.

In June 2020, the States voted in redevelopment plans for the Guernsey Dairy, despite concerns from the previous P&R Committee at the time. This led to £26 million being earmarked for the Future Guernsey Dairy Project.

These funds would not be required until 2022 at the earliest. 

The States Trading Supervisory Board, at the time presided over by Deputy Peter Ferbrache, argued that: "The Guernsey Dairy cannot continue in the medium to long-term as a sustainable concern without investment."

“There is no more iconic image of the island than a Guernsey Cow in a Guernsey field," said the previous STSB President, now the President of Policy & Resources, which has led on the development of the GWP.

"If we want to retain that, then we need to ensure the dairy industry remains viable and sustainable, and Guernsey Dairy is key to that."

Pictured: “The current premises are no longer fit for purpose, so major investment is needed to provide a modern facility that is more efficient and meets the highest food production standards,” said Deputy Ferbrache at the time. 

In the proposed GWP, the Dairy Project has been "held in abeyance". If the GWP is approved in its current form in the meeting starting on 21 July, no funding will be available for the dairy rebuild until mid-2025.

The urgent investment required was called for last year following a survey conducted by Property Services and other technical experts. They found issues with building conditions and advised that "work ought to be progressed without delay on either a major refurbishment or new purpose-built dairy."

The policy letter stated: "The Guernsey Dairy faces daily challenges in providing its services. The design of the current Dairy and the legacy equipment have led to increasing inefficiency of production, resulting in high production overheads, increased wastage, machine breakdown/maintenance downtime, and additional staff overtime in order to maintain operations."

By comprehensively voting in the policy letter last year - 29 votes to 4 - the Assembly agreed to formally include the Dairy Project in the current capital portfolio.

However, the GWP now states that it does not expect to make any progress this term on the Dairy Project, and it has been re-labelled a ‘pipeline’ action, shunted down to ‘priority four’ of four.

Additionally, the Guernsey Dairy continues to suffer a decline in milk sales, with a trend towards plant-based milks, and a reduction in door-step deliveries being cited as two main issues.

Pictured: The Guernsey Dairy has occupied its present site since 1959, with the last major refurbishment taking place in the 1980s. Pictured is the Dairy's latest range of lactose-free milk. 

The STSB in 2020 argued that "not investing in either a refurbishment or replacement Dairy building may ultimately result in an inability to supply milk to meet demand, resulting in a requirement to import liquid milk."

This could lead to retailers dictating the market, and complete decline in the dairy industry. Farms could be sold, and the Guernsey Cattle Breed could decline, the board warned at the time. 

The last States agreed that the dairy farming industry is "inextricably linked to sustaining the island’s rural environment."

The now-President of the States’ Trading Supervisory Board, Deputy Peter Roffey, is holding fire on responding to the abeyance, with the STSB yet to meet and discuss the ramifications of the GWP decisions.

“In July 2020, the States gave the STSB the go ahead to develop detailed proposals for either a major refurbishment of the current dairy, or construction of a new facility at the present site or another location," he said. 

“It was anticipated this would be operational by 2024, and work on preparing the business case has begun."

Pictured: “We do recognise the considerable challenge that P&R has had in developing a capital programme that tries to balance all the various demands and requirements of the community,” conceded Deputy Roffey.

“In the draft Government Work Plan, the project has now been included in the list of ‘pipeline’, which would indicate a longer timescale for delivery than was previously envisaged,” continued Deputy Roffey.

“The States’ Trading Supervisory Board has not yet met to discuss this, and to consider the likely consequences for the programme.”