The UK and Arla's biggest dairy farmer has sold up because he was not offered a high-value contract to supply Tesco, it has emerged.

The sale of David Barnes' farm near Carlisle, which produces 18 million litres of milk a year, raises questions over the way the Tesco deal is being rolled out by suppliers Arla and Robert Wiseman Dairies.

"It is creating haves and have-nots," claimed quota broker Ian Potter.

Arla Foods admitted Barnes had been passed over for one of Tesco's 22p-per-litre contracts.

Chairman of the Arla Foods Milk Partnership, Jonathan Ovens, said the farm was not in the right place to efficiently supply the processing facilities dedicated to Tesco milk.

There were also claims that some Arla farmers would not sign their Tesco contracts in time for Arla's self-imposed 1 July deadline.

But Ovens dismissed the concerns. "All of Arla Foods Milk Partnership's 400 dedicated Tesco suppliers will be ready to supply at the start of July," he insisted.

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