Farmers fear it could lead to a fall in the price of Welsh milk

The Co-operative Group is to consider offers for its ACC Milk business which has a plant in Cardiff and creameries in Carmarthenshire and Denbighshire.

The USDAW union said the move was a surprise but it had received assurances that a sale was not imminent.

Farmers leaders say it is 'worrying' and fear any deal could result in a fall in milk prices in Wales.

I am gravely concerned that milk producers will need to find another buyer, and the milk price will be hit once again Brynle Williams, Conservative AM

ACC employs more than 400 people in Wales at Llangadog in Carmarthenshire, Llandyrnog in Denbighshire and at Cardiff's F&D processing plant.

It produces fresh milk, cheese, butter, dairy desserts and dried milk powder.

A company spokesman said following a review of its business, the Co-operative Group had decided to explore options for its sale.

"The dairy industry has gone through significant change in recent years and ACC operates in an increasingly competitive market," he said.

"In these circumstances, the Co-operative Group board believes this approach to be in the best interests of employees and the business."

Asset stripping

Staff are represented by the Union of Shop, Distribution and Allied Workers (USDAW).

National officer Sharon Ainsworth told BBC Wales Online that the announcement had come as a surprise.

ACC had recently invested �1m in the creamery at Llangadog.

But she said: "They assured us they are just mooting the idea at the moment."

She said when selling off companies the group had a good track record of not going for the highest price to protect jobs and avoid asset stripping.

But Brian Walters, vice president of the Farmers Union of Wales, said: "This is a worrying development.

"The FUW's prime concern now is to try and secure the long term future of these creameries for their employees and also for the local farmers who supply them with fresh Welsh milk."

Brynle Williams, Conservative AM and his party's spokesman on agriculture said: "This will come as a real shock to farmers.

"The milk industry is only beginning to recover from diminishing milk prices.