Supermarket domination means that Orkney farmers have no choice but to market Orkney prime cheddar through brokers, McLelland, according to local dairy farmers.

A straw poll of Orkney dairy farmers - who formed a co-operative to run Orkney Cheese in 1999 - revealed that, despite initial misgivings, they accepted that McLelland were the best people to promote Orkney’s prizewinning cheddar, and most agreed that to date the company were doing a good job.

Orkney Cheese have featured in a number of publications lately, including The Scotsman and the National Farmers’ Unions of Scotland’s own newsletter Scottish Farming Leader, highlighting the better prices Orkney dairy farmers can attract for their milk, thanks to the cheese factory.

Currently, local farmers are getting 21.5p per litre, which compares favourably with mainland farm prices, which can be as low as 11p per litre in some cases. And just this week Orkney Cheddar is featuring in a promotion through the Iceland chain of stores of five cheeses under McLelland’s wing – including McLelland’s own Seriously Strong Cheddar, and cheese from the Isle of Bute.

However, some disquiet has been expressed by workers at Orkney Cheese about the role of McLelland – who have a 20 per cent stake in Orkney Cheese – in the running of the local factory. Shortly after moving to the new site at Hatston Industrial Estate, management of Orkney Cheese made several workers redundant.

Further concerns – both about McLelland’s apparent domination of the market, and the long-term future of Orkney Cheese – have also been raised by former salesman to supermarkets, Mr Andrew Paterson, who has Stromness roots.

He had visited McLelland’s own website where, he said, they gave the impression they owned Orkney Cheese. “Can Orkney Cheddar Co sell independently of McLelland?” he asked. “If the distribution agreement is exclusive, unbreakable and long-term, then you may be absolutely sure it is a shoddy deal for Orkney.

“I worked for a company that sold only to the top supermarkets in Europe, that delivered direct, that made good profits, fair pricing, attention to detail – that and mutual good faith are the basis of good business.

He added that Orkney Cheese should be branded to protect its manufacture in Orkney.

“The only sensible way forward is for the company to remain independent and find profitable markets. Selling direct to multiples in UK, France, Holland Belgium and Germany would be good.”

However, local dairy farmers argued that without McLelland they would be unable to get a foot in the supermarket door. A number said that, having taken over the running of an established factory whose considerable output was already brokered by McLelland, they were not in a position to “go it alone”.

One local dairy farmer who didn’t want to be named said: “They (McLelland) are certainly claiming the cheese as their own. But the way the market is just now, there’s no way we can do it otherwise. McLelland handle over 90 per cent of the cheese in Scotland. There’s no room for anybody else. There’s not a big lot of choice.”

He blamed the supermarket system for trapping them in this situation: “It would be a lot better if we didn’t have to deal with supermarkets at all. It’s more the supermarkets than McLelland.”

He added that when it was proposed that McLelland became more deeply involved in Orkney Cheese three years ago, he had been quite anxious about it. However, both he and other local dairy farmers were given a presentation by McLelland representatives which had helped allay some fears.

“They really seemed down-to-earth people,” he commented. “There’s no way an amateur could deal with the supermarkets. They are very professional folk.”

Jackie Scott of Caldale in St Ola, agreed: “I don’t think we could do without McLelland – they have such a hold on the market. Orkney Meat are different – they started Orkney Island Gold and built up their customers, whereas we came into it as an established business. If we started to market it ourselves we would end up with big stockpiles of cheese and McLelland probably wouldn’t work with us then. I think they can be quite ruthless, but folk in that business likely have to be. We met McLelland people at the meeting. I was very impressed with them.”

He stated: “How much influence they have I don’t know – I’m not one of the directors. They do have a stake up here, but they’re outnumbered on the board.”

He added that dairy farmers supplying Orkney Cheese had just attended a National Dairy Farm Assurance training day.

“McLelland will be behind this Farm Assurance day yesterday. Everybody who supplies Orkney Cheese has to be in it, but it’s not for the customer’s benefit – it’s for the supermarkets. The supermarkets push the price down if you’re not in it.”

Jim Baillie of Sebay in Tankerness was pragmatic: “I think we need them to sell our cheese. Where are you going to go? You need folk to sell the stuff you make. It’s the same as Orkney Island Gold – they’ve got a man who sells their stuff. If you don’t get your cheese sold it’s a disaster. You leave it to the big boys to do it.”

Edwin Ritch of Drydale in Stromness, however, was less happy about McLelland’s influence.

“It’s not a thing I was in favour of at the time,” he said. “They do have a big hold. In Orkney we’ve had a good product for a long time, but whether they’re doing the same now I can’t say.”

He added: “In my experience, it’s not a good thing when one business – no matter what type it is – gets too big a hold of the market. You need some opposition, otherwise it’s not good for the producers, and it’s not good for the customer.”