Dairy Crest has announced it is selling the assets of its liquid milk operations to Müller UK & Ireland Group in a deal worth £80 million.
The deal, which will need to be approved by the competition authorities and shareholders, will affect about 700 farmers who currently supply Dairy Crest.
The company says it wants to concentrate on its cheese, packet butter and spreads businesses.
A statement released by Dairy Crest on Thursday morning (6 November) said the move would “help to create a more sustainable UK dairy sector by delivering economies of scale and cost efficiencies that will underpin investment in the industry.
“This in turn should help the UK to compete more successfully in global markets, which is essential for British dairy farmers.”
Mark Allen, chief executive of Dairy Crest, thanked the farmers affected by the deal for the contribution they had made to the business.
“Muller Wiseman are very keen to take on board you as a group of farmers and are very keen to have a great British supply so your contracts will be transferred to them on completion,” he told Farmers Weekly.
He added: “Dairy Crest is very proud of the dairy business it has built and we are delighted that it will be combined with Müller Wiseman Dairies’ equally well-established operation. This proposed sale is a great opportunity for our two companies, our farmers, our staff, our customers and consumers”.
“In the months ahead we will do all we can to minimise the uncertainty that we know today’s news will bring for the many people associated with our business. I want to thank everyone who has been involved in Dairy Crest’s dairies business over the years. Together we have worked hard to build a business of which we should be proud and which has a potentially exciting future as part of Müller Wiseman Dairies.”
The deal will see the factories at Foston, Chadwell Heath and Severnside transferred to Muller.
It also includes the Hanworth glass bottling site, where Dairy Crest is consulting with employees on the site’s future, and 72 depots.
But Dairy Crest will retain full ownership of the previously closed dairies at Totnes and Fenstanton; its Chard site, where it is also consulting with employees on the site’s future; and a number of already closed depots.
The two companies will also enter into a supply agreement whereby Müller Wiseman Dairies will sell bulk butter to Dairy Crest for five years.
In addition Dairy Crest will provide certain transitional services to Müller Wiseman Dairies.
More to follow….