Sale of Central Dairies to newly forged dairy co-op continues in wake of recent fire

A week after a fire gutted Central Dairies' warehouse and halted production, milk processing resumed Tuesday — an eventful recovery, as a newly formed dairy co-op continues to eye the facility despite the blaze.

The Newfoundland and Labrador Dairy Co-operative, incorporated in November, is in the process of buying the Mount Pearl processing facility, owned by Quebec-based Agropur Dairy.

Crosbie Williams of Pondview Farms, located in the Goulds neighbourhood of St. John's, is one of the 19 farmers who have formed the new co-operative.

"We will be a 100 per cent owned-and-operated dairy supplier here in the province, something that we're very proud of," Williams told CBC News.

"We're going to keep the brand of Central Dairies. It's a time-honoured brand. It's well recognized in the dairy case, and it's not something that we dare change because, you know, we've enjoyed good consumer support with that brand."

The sale was first reported by online news outlet AllNewfoundlandLabrador.

In the past, Williams has spoken about the financial struggles that farmers face due to the rising cost of living. He said forming a dairy co-operative is a creative solution to that challenge.

"Cost savings are omnipresent in farmers' minds every day, and it's something that's our reality. If we don't keep that in mind, if we don't stay sharp and focus financially, we won't be around to keep the lights on," he said.

Agropur spokesperson Guillaume Bérubé said Agropur reached an agreement to sell the dairy brand and processing facility to the Newfoundland and Labrador Dairy Co-operative a few months ago. The deal has not been finalized, he said.

"We are currently in a period of transition, and during that period of time, Agropur remains responsible for all operations. And the transaction won't come into effect for another few months," said Bérubé.

Bérubé cited Newfoundland and Labrador's unique economy as one reason behind Agropur's decision to sell Central Dairies, saying the province has a "modest local market."

"They are remote from other markets and they also have to bear alone the high cost of transporting their milk over long distances," said Bérubé.

"So it's because of these unique circumstances that local dairy farmers, including our members on the island, banded together in a new co-operative and approached Agropur."

Williams and Bérubé said the deal will close in a few months. Both declined to comment on the cost of the sale.

Fire strategy

While last week's fire didn't reach the production floor, Bérubé said there was smoke and water damage, which prompted the company to halt processing. He said that triggered contingency plans to address the impact that stoppage had on the local market, which included bringing in milk from Agropur's Bedford, N.S., facility.

On Tuesday, Bérubé told CBC News in an email that production resumed at the facility, though things won't go back to normal just yet. He said Agropur's Farmers-brand milk will be on the store shelves until the plant returns to full capacity.

Bérubé said the cause of the fire is still under investigation and he couldn't estimate its financial impact.

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