Robert Wiseman Dairies has announced it has taken on a new 50m-litre contract to supply the Co-operative Retail Trading Group's stores in south-east England.

The contract was held by Dairy Farmers of Britain, but DFoB announced its resignation on Tuesday (29 July) after concerns that the direct supply to store arrangement was too expensive. DFoB only renewed the Co-op contract in August 2007, and had hoped to move away from supplying stores, towards supply through regional distribution centres, but no timescale was agreed and the company decided it was uneconomical to continue with store delivery.

Consequently, DFoB said it would close its Poyle distribution centre near Heathrow and also reduce staff at its Portsmouth dairy and depot. Chief executive Andrew Cooksey said that despite the redundancies, the firm remained committed to the Portsmouth dairy and would shortly sign a new lease.

Wiseman planned to start servicing Co-op stores in south-east England from late September 2008.

But with a relatively short time until then, and concerns elsewhere in the industry over lack of supply, quota broker Ian Potter was intrigued as to where the 50m litres of milk would come from. "Fifty million litres is a lot of milk. Sainsbury's and Tesco already have first call on a lot of Wiseman's milk, so it's a mystery where they'll find the extra litres at relatively short notice."

A Wiseman spokesperson said milk supply had been organised from a combination of sources, including existing arrangements with Milk Link and First Milk, as well as direct supply from its own farms.