Dairy Crest profits fall

8 June 2000



Dairy Crest profits fall

DAIRY Crest has reported a 4% fall in pre-tax profits to 44m in the year to March 31.

Turnover increased from 773.8m to 793.7m.

These figures follow Dairy Crests acquisition last month of Unigates dairy business for 250m.

Dairy Crest has tried to combat rising distribution costs, the strength of sterling and pressures from retailers by focusing on higher brand margins, reports the Financial Times.

Lines such as Clover spreads and Cathedral City cheese now account for 45% of sales and about two-thirds of profits.

The Daily Telegraph reports that sales of Cathedral City have doubled in the past year when cheddar sales rose only 1%.

Chief executive John Houliston said the Unigate acquisition will lead to a short-term decline in overall profits in the value-added sector.

The FT comment says it is questionable whether dairy products can be differentiated by throwing money at branding.

However, it says that Dairy Crest brands demonstrated higher volume growth than their respective markets.