Dairy company Arla Foods has announced the closure of its Sheffield Park dairy in East Sussex, with the loss of 250 jobs.

The small dairy was set up to process and package milk for some of Arla’a smaller retail customers, with a production line capable of rapid label changes.

But it has fallen victim of the sale of Arla’s catering wholesaler, London Foodservice, to Dairy Crest late last year.

A spokeswoman said: “We’ve lost volume at the site on the back of the sale of London Foodservice to Dairy Crest, who obviously has its own suppliers. This has lead to significant overcapacity at Sheffield Park.

“Farmers aren’t affected,” she insisted. Their milk will be trucked to dairies at Hatfield Peverall in Essex and Okethorpe in London instead.

Milk will still be collected in the meantime, she promised, and a cold store would remain open on the Sussex site.

Only 80 jobs would be saved at the dairy.