One of the world’s major charitable trusts took over stewardship of 40,000 acres of agricultural land yesterday after buying the Co-operative Group’s farming business in a £249 million deal.
The Wellcome Trust, best known for funding drug development and medical research, announced the purchase of more than a dozen farms and other contract farming agreements after a “wider strategic review” first revealed by Co-op executives earlier this year.
The 850-acre Rosemount Farm, by Blairgowrie, was one of a string of Scottish farms to be sold, alongside major packing sites at Carnoustie and Longforgan.
The trust said it would invest in and develop the Farmcare Trading business, strive to be a responsible landlord, and continue educational initiatives like the successful ‘Farm to Fork’ programme.
It will add the assets to an endowment portfolio which already runs to £16.5 billion, using the proceeds to continue charitable work which has seen grants and other awards of more than £11bn made in the last 30 years.
The trust underlined its existing “significant agricultural holdings”, including at Hinxton in Cambridgeshire, Kings Langley in Hertfordshire, and Alpraham in Cheshire.
All 242 full-time employees, including 85 in Scotland, will transfer to the new owner. It is not known how hundreds of seasonal and contract workers could be affected.
Chief investment officer Danny Truell said Wellcome was a long-term investor, which valued “responsible stewardship over quick profits”.
“We believe that we are ideally placed to develop and grow the Co-operative Group’s farms and farm business while providing continuity, and we are delighted to have acquired them in what will be one of the largest global deals of its kind,” he said.
“The trust’s philosophy is to provide long-term investment for the businesses and property we hold, in good times and in bad.
“We will take this approach to running Farmcare Trading Ltd as a going concern, giving a business that is already strong and successful the support and resources it needs to grow, to the benefit of employees, tenants, partners and local communities.”
Rosemount, which produces wheat, barley, carrots, pea and potatoes, as well as more than 1,000 tonnes of strawberries a year, employs more than 250 temporary workers at the height of its harvest season.
Packing facilities at Clayholes Farm, by Carnoustie, and Kingswell, near Longforgan, focus on potatoes and soft fruits and broccoli respectively and have employed up to 120 people at full production.
Other Scottish sites affected are Delab Farm near Inverurie, Whitsome Hill at Duns in the Borders, and Monktonhill in Ayrshire. The Co-op had also farmed thousands of acres at Errol and Scone under contract.
The sale comes as the debt-crippled Co-operative Group seeks to plug a capital black hole in its balance sheet after the near-collapse of its scandal-hit banking arm.
Interim CEO Richard Pennycook said the sale was an “important development” for the company, which also sold its pharmacy stores to Bestway for £620m last month, adding that he expected the business to “continue to thrive” under new ownership.
“The sale proceeds will enable us to further reduce our debt and progress with the delivery of the clear strategic plans we have in place for our core retail and consumer services’ division,” he said.