Fri, 07 Nov 2014 | BUSINESS SALE
Dairy Crest, which supplies about 15 per cent of Britain’s milk, has sold its under performing dairy business to German rival Müller Wiseman for £80 million.
The maker of Cathedral City cheese and Country Life butter, Dairy Crest, has recently announced a dramatic 95 per cent drop in profits to just £900,000 from £19.7 million for the six months to September.
Volatility in the markets was blamed for the profit slump, alongside significant price drops for cream as well as skimmed milk and cream powders.
The business, which produces 1.3 billion litres of milk per year, said in a statement that the sale would be of benefit to consumers, customers and dairy farmers.
The deal has been welcomed by some, with Peel Hunt analyst Charles Hall saying it is good news for dairy farmers in the UK, who are paid some of the lowest prices in the whole of Europe. It will also encourage competition between Aria and Müller Wiseman and create the setting for a healthy dairy industry.
He said: “It is clearly unsustainable that all of the major players are losing money in the supply of milk, and this deal should be welcomed by dairy farmers.”
Following the deal Britain’s milk industry will now be in the control of three major players - Müller Wiseman Diaries, Denmark’s Aria, and the UK’s First Milk farmers co-operative.
Post-sale Diary Crest will hone in on its cheese, packet butter and spreads business, which together brought in £447 million of sales with £56 million in profits in the last 12 months.
Müller Wiseman will inherit Dairy Crest’s factories in Derbyshire, Essex and Gloucester, its glass-bottling site in Hanworth and 72 depots in the sale.
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