£5.5m deal secures extra 50m litres of milk for DFB

Dairy Farmers of Britain has acquired the dairy business of the Lincolnshire Co-operative Society, adding 50m litres of milk to its turnover.

The 5.5m deal includes the Boultham Park Dairy in Lincoln and eight distribution depots in Lincs and Cambs, as well as the Clarey’s luxury icecream brand.

The new business will add £23m to DFB’s annual sales, mostly through liquid milk sold under its Dairygate brand.

Malcolm Smith, CEO of Dairy Farmers of Britain, said: “This underlines DFB’s continuing commitment to our long-term strategic aim of delivering a sustainable return to our dairy farmer members, through vertical integration and brand development.”

But an industry source said DFB was desperately in need of processing capacity before its Arla deal expired next year, and was not afraid to undercut other suppliers. “At present, there is some balance among suppliers, but if DFB goes in to compete for these big accounts bidding solely on price, it’s not good for farmers.”

A DFB spokesman denied this claim. “We have always got to remain competitive, but as a co-op, we aim to improve the milk price.”