Medina Dairy has announced a 1p/litre price increase from 1 September that will take its average standard litre price to 25.75p/litre.
The milk processor, one of the hardest hit by the closure of the food service sector during the coronavirus lockdown, says the increase reflects a more positive market environment and its efforts to take significant cost out of the business.
It follows a 1p/litre increase on 15 June, 1.5p/litre on 1 July and 1.5p/litre from 1 August and will return its price to pre-coronavirus levels.
The lockdown had a major effect on the firm because a significant chunk of its business is servicing food service and wholesale markets, supplying thousands of hotels, pubs, restaurants and coffee shops.
Medina announced in April it was slashing the milk price paid to its suppliers and delaying their milk cheques to ease its cashflow.
But the firm said its Watson’s Dairy fresh liquid processing site in Hampshire will become a casualty of the current crisis.
It has announced the planned closure of the plant, which employs 144 staff, as part of a strategy to save money by consolidating its processing operations.
The business says that the move should not have an impact on any of its 156 farmer suppliers as their milk will be processed at others sites.
These include Buckley’s Dairy in West Yorkshire, Severnside in Gloucestershire and the Acton dairy in west London operated by Freshways, Medina’s processing partner.
The proposed closure reflects the extremely challenging market conditions being faced by the entire fresh liquid milk sector and in particular the loss for Watson’s of a major retail contract which makes the site unviable, said a statement.
Sheazad Hussain, chief executive of Medina Dairy, said: “It is with much regret, that we have announced our proposal to cease operations at our Watson’s Dairy site.
“The proposal follows a major review of our business which concluded that by simplifying and consolidating our processing activity we will be able to create a more sustainable and appropriately scaled business.
“This in turn will enable us to continue to deliver a high level of service to existing customers and provide a platform from which we can respond to future market opportunities.”