Cadbury Schweppes has blamed rising milk prices for contributing to a big slump in its first half pre-tax profits.

The company reported profits before tax of £69m in the six months until 30 June, down from £105m in the same period of last year, a drop of 11%.

Tood Stitzer, Cadbury Schweppes chief executive, said the company was struggling as a result of increased milk prices caused by the rising cost of feed and low production.

“We are experiencing some input cost increases, notably in dairy products in many of our markets anround the world,” he said.

“As a result we are unlikely to see margin progression in the full year,” he added.

Cadbury uses about 200m litres of milk each year from First Milk and Dairy Farmers of Britain.

It also agreed to take milk from Selkley Vale last year, a contract which is setto begin in October, after industry experts warned the chocolate manufacturer’s milk supply was at risk with DFB supplying so much of its milk.

Mike Bessey, independent dairy consultant, said all other costs had gone up, so it was not fair to pin the profit slump on milk prices.

“The company has also had its own problems with product recalls which would undermine sales.

“Cadbury wouldn’t have been paying more for their milk all year anyway – the increases have only been the past few months.

“The public must be getting puzzles because there are so many stories about prices going up, but so far the farmers hasn’t seen any of it yet.”