A fair share of controversy
I haven’t written much about Freshways over the years, and certainly haven’t dedicated an article to it for many moons. But there seems to be more going on in this business than any other right now, and it’s also 30 years old this month. Happy anniversary, then.
It’s fair to say, though, that the business has courted its share of controversy over those years. Recently there were its issues with Covid and lockdown, when it crashed its price (and I accept it had to do that); then there was the Panorama programme about one of its farms in February 2022; its (logical but at one time implausible) ‘sleeping with the enemy-esque’ merger with arch-rival Medina; farmer grumblings over milk contracts; plus doubts over its long-term future having sold its Acton processing site.
“The middle ground isn’t dubbed the Wild West of dairy for nothing.”
Then there are the small library’s worth of impossible-to-read accounts from dozens of different holding companies, which blurs transparency, shall I say. But I’m afraid this is far from unique in this day and age. On top of that there is its controversial boss Bali Nijjar. Say what you like about him (and a lot of people have and do!) there’s no doubt he is one of the canniest, sharpest pins in the cushion. You have to be, to survive in the market Freshways operates in: The middle ground isn’t dubbed the Wild West of dairy for nothing.
Question marks
With all of the above in mind, I think it’s fair to say there have been more question marks hanging over this business than perhaps all others. I, for one, admit to being one of the people who once dismissed its chances of making it into the premier league. I thought it would jog on in division one playing a useful but not earth-shattering role supplying milk and other provisions into those independent shops and food service outlets. Not so, now, it would seem.
That’s because it has just announced that it is building a new 300m litre greenfield site in West Bromwich, and that its Watsons plant is ramping up to a similar capacity, so the two of them will easily cope with the closure of Acton in two years’ time. It also has a new distribution hub for London and the South West; and it has this month announced it is buying Milk & More from Muller. This a big league move indeed. In addition it took over food service business Kent Dairy last year (also not without its controversy as Pensworth immediately folded), and has bought another five or so small wholesalers in recent years. It has also recently purchased the luxury milk shake manufacturer Indul. On top of this, it has a new sustainability team and agenda in place. In milk price terms, in 2019 Freshways paid the fifth lowest price in the UK of 20 processors recorded; in 2020 the second lowest (due to Covid); and in 2021 the third lowest. But in 2022 and through 2023 it has paid the sixth highest milk price. Pretty respectable, that.
After the Medina farce with Sainsbury’s it is pretty clear that Freshways won’t currently win out in retail business. At least not now. But who knows, when its new factory comes on stream and Watsons is going full bore again? Aside from that, it is clearly aiming to be the biggest and the best in its food service/middle ground field, and its once opaque strategy is now pretty clear. What isn’t though, is whether farmers will like what they see enough to hitch their cows to the ‘new’ Freshways wagon. Because the business looks as if it is going to need a lot more milk for its next 30 years than it has had over the past 30.
Double huzzahs
Now, to NatWest. On 16 May this year its (now departed) CEO Alison Rose posted a blog on the bank’s website bragging about its support for agriculture and how it has committed £6.7bn to the sector. The bank stated the “agriculture sector should be classified as a critical strategic industry”, and that “farmers should be financially rewarded for achieving [better climate] outcomes through discounted finance or access to improved investment”. And it duly announced a new set of partnerships “to accelerate change at an industry level”. Double huzzahs then!
Meanwhile, though, and away from all the guff, NatWest’s sustainability and retail bods had other ideas… and it’s here those promises become very interesting indeed…
That’s because in 2021 the bank launched an app for its customers that calculates a customer’s carbon footprint and then makes recommendations on how to reduce it. It has been under the radar since then, until the app was propelled into the big time in mid-November by the mainstream media, with howls of rage emanating from the likes of the Daily Telegraph and the Daily Mail over the bank’s lecturing and “finger wagging”. So why does this matter? Well, the app cheerfully tells customers to (among other things) “stop drinking dairy milk in favour of plant-based alternatives and to stop eating meat”, as well as to drive an electric car and “mend your clothes”. The app has been developed by a company called Cogo, which was set up by a guy who certainly has vegan sympathies. My guess is that NatWest has swallowed all of the climate guff that this company has recommended and built into the app, without taking into account the nutritional density of dairy and meat versus other foods; nor the relative cost of dairy and meat versus vegan alternatives, nor any nutritional aspects of its recommendation to go plant-based. Thus, here we have a bank dishing out nutritional advice that will cost their customers more (vegan diets do), and possibly harm them more. Since when does a bank dish out nutritional advice? Apparently the app has already “helped” over 330,000 customers “better understand their carbon footprint with easy-to-action behavioural changes”.
But there’s more. That’s because there’s the slightly embarrassing issue that the bank is recommending its customers stop eating products from livestock farms, which will, er, be livestock farms to which NatWest has lent a massive percentage of its £6.7bn, and which is secured on the value of that land. And which will tank if the app’s end game for everyone to ‘go vegan’ is successful.
“You can dismiss all of that guff about its commitment to farming.”
Taken to its ultimate conclusion, the net effect of this app will be to devalue the dairy and livestock industries in many rural areas of Scotland, Northern Ireland, Wales, Cumbria, and the South West. In so doing, a significant part of the rural infrastructure that is built on the very back of livestock farming – hauliers, mechanics, vets, tractor and machinery dealerships, general parts and rural clothing stores, feed compounders, reps, etc – will thus also be wound down. A lot of these will be customers of the bank. If brains were dynamite, NatWest’s sustainability team wouldn’t have enough to blow off a corporate branded hat.
Roll out to other banks
Cogo is, of course, wanting to roll this out to other banks, too, in order to create the change it wants to see, and believes is right. Fortunately, HSBC’s Head of Agriculture assures me that it works extremely closely with its sustainability team, and they understand how front and central agriculture is to sustainability. It won’t be using Cogo’s app, he says. Virgin Money said it was working constructively with its clients on carbon and providing favourable lending for carbon reduction. I’m not even going to insult Oxbury by asking it. Happily none, like NatWest, were trying to veganise its customers.
The app and the vegan championing controversy has gone right the way to the top of the NFU, and presidential runner Tom Bradshaw has been all over it. So a (blown-up) corporate NatWest hat off to him. As a result of his and the NFU’s efforts “NatWest has recognised the NFU’s concerns and the NatWest digital banking team has committed to a full content review of the carbon tracker across the dietary recommendations suggested on the app.” If it doesn’t remove it altogether well… at least you know where you stand, and you can dismiss all of that guff about its commitment to farming.