DC shares dive after Tesco’s cut

SHARES IN DAIRY Crest slumped massively on the London Stock Exchange on Friday morning (Aug 27) following news of a huge cut in sales to Tesco.

Initial trading saw the stock slide by 63p – over 16% – to 318p after the announcement from Tesco that it was rationalising its supply base to only two suppliers.

This means Dairy Crest will lose about £60m of sales and initial estimates suggest that the profit impact will be £12m to £15m annually.

A Dairy Crest spokeswoman said a range of initiatives would be implemented to mitigate the effects of the loss.

But Robert Wiseman Dairies is celebrating after upping its share of Tesco‘s liquid milk requirements from 40% to 60%.

Arla Foods UK has retained its contract with the supermarket and will make up the balance.

For further analysis of the UK milk supply sector see next Friday’s Business section in FARMERS WEEKLY.