The owner of a Circular Head dairy giant says he is committed to supporting his workers and dairy farms after Fonterra ended its milk supply agreement with the business.
Xianfeng Lu owns Van Dairy in the northwest of Tasmania and had an exclusive supply agreement with Fonterra for several years up until recently.
According to Fonterra, ‘unresolved commercial factors’ were the reason they ended the agreement and stopped collecting milk from all Van Dairy farms on February 1.
Lu said the deal represents a loss of around 25 million litres of milk per year and claimed the contract was ended after extensive discussions because Fonterra wanted to reduce their production.
“I will continue to fight for the workers on my farms, the dairy industry and employment in the Circular Head region,” he said.
“I am confident there are options out there for Van Dairy to continue its current operations and will continue to pursue these, despite the actions of Fonterra.”
Fonterra says they remain committed to their operations in Tasmania and Victoria and have no intention of reducing production.
