November 20, 2024
BANGOR DAILY NEWS (BANGOR, MAINE

Governor sees no higher milk prices after supermarkets’ dairy decision

AUGUSTA — Shaw’s Supermarkets’ decision to stop buying Old Tavern Farm Inc. milk, forcing the farm to close its Maine processing operation, should not lead to higher prices, Gov. John R. McKernan said Thursday.

“This was not a supply issue. This was not a price issue,” McKernan told a State House news conference.

“There ought not to be a reason” for retail price changes, he said.

But the head of a Maine dairy farmers’ group said Shaw’s decision to stop accepting milk from Old Tavern, which was sold under Shaw’s label, had caused a “total disruption” in the dairy industry.

“Those dairy farmers don’t know who they’re going to be shipping to,” said Bill Harris of Dayton, board president of Maine Milk Producers Inc.

Harris appeared at the news conference with McKernan and Agriculture Commissioner Bernard W. Shaw.

Uncertainty over the effects of Shaw’s decision prompted McKernan to ask the supermarket chain whether it intended to replace Old Tavern’s milk with other Maine-produced milk.

“I received an assurance this morning from Shaw’s that they will continue, in the short and long term, to buy milk produced and processed in Maine,” McKernan said.

Shaw’s spokeswoman Margaret McEwan confirmed the company’s promise.

A decision by Shaw’s to buy milk processed out of state would have resulted in lost dairy jobs and “a much smaller market for Maine dairy farmers,” said McKernan.

Old Tavern said it will be forced by Shaw’s actions to close its Yarmouth processing plant, eliminating 26 jobs.

The governor said he had not received “a satisfactory” explanation of why the chain dropped Old Tavern’s milk.

Shaw’s said in a prepared statement that it found problems with the Old Tavern plant during an inspection conducted as part of a new program to audit milk suppliers for compliance with health standards.

After Old Tavern corrected the problems, Shaw’s agreed to accept its milk, the Massachusetts-based chain said.

Then, the statement said, “Old Tavern notified Shaw’s that they had decided to discontinue operations.”

But Old Tavern spokesman Greg Leonard disputed Shaw’s version of what happened.

He said the company had never failed a state or federal inspection and that Shaw’s only gave Old Tavern a 55-day guarantee for accepting its milk. Old Tavern’s previous agreement with Shaw’s was for 10 years, he said.

“We can deal with 10 years, but we can’t deal with 55 days,” he said.

Shaw’s McEwan said the company offered a 55-day guarantee because it would take that long to conduct inspections at all dairy plants competing to supply milk sold under the Shaw’s label.

Leonard said Old Tavern plans to sue Shaw’s to try to recover its losses.

Maine’s agriculture commissioner, Shaw, said state inspections of Old Tavern’s processing facilities showed it was operating well within state quality standards.

“I really don’t think it was a quality issue at all,” he said.


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