DC moves to raise cheese profile

DAIRY CREST is trying to reverse a slow-down in sales of the UK‘s top-selling cheese brand which has contributed to consecutive monthly price cuts for some of its suppliers.

Cathedral City, worth £72m to Dairy Crest last year and made at its Davidstow creamery in Cornwall, was a key part of its value-added portfolio.

But poorer-than-expected sales have been blamed for a downgrading of the company‘s profit forecasts at the end of March.

The announcement led to 15% being wiped off the firm‘s share price.

Farmers on cheese contracts also suffered, with April milk cut by 0.5p/litre to 19.18p/litre. A further 0.2p/litre reduction is also planned for May supplies.

Those on liquid contracts are unaffected.

The failure of Cathedral City to live up to expectations was blamed by City analysts on Dairy Crest‘s strategy of trying to recoup a rise in milk values by pricing the mature Cheddar cheese at a higher level than its competitors.

That cost Dairy Crest an estimated £3m in lost sales.

Measures being taken to halt the fall in sales include the launch of new products like Cathedral City cheese sticks that come with a pickle dip and pre-sliced and grated variants that reflect consumer demand for more convenient foods.

Television and radio campaigns are also planned.