Higher costs and an uncertain economic outlook have prompted Dairy Crest to consider closing its Nottingham dairy.

The company announced on Tuesday (30 September) that it had begun a 90-day consultation with unions and the 215 employees at the Lenton site.

The dairy was acquired from Express Dairies in 2006 and is predominantly a glass bottling operation, processing approximately 90m litres of milk per annum.

In a trading update, Dairy Crest said that while sales of its key brands – including Country Life butter and Cathedral City cheese – had performed well over the past six months, higher costs for milk, vegetable oils, packaging, energy and fuel meant it had to take steps to improve overall manufacturing efficiency.

“Our Foods business has made good progress in the first half of the year and our portfolio of key brands continues to grow strongly,” Mark Allen, Dairy Crest chief executive said.

“[Our] Dairies [division] has been impacted by higher input costs and a weaker ingredients market. The commercial environment has become more challenging over recent months and we are taking actions, including significant cost reductions, to ensure our business and our brands are well positioned for the trading environment ahead.”

News of the planned closure came in the same week as the company opened its new regional distribution centre at Aldridge in the West Midlands.