MD Foods wants to stay in UK sector

09 March 1998

MD Foods wants to stay in UK sector

MD Foods International (MDFI) said a delay in agreeing a capital injection
with investors and bankers did not mean any lessening of its determination to
stay in the UK dairy sector.

The group said there was “nothing untoward” behind the delay. However, the international arm of the Danish dairy co-operative has suffered heavy losses in the UK because of a large investment programme and poor returns in the milk market.

The group had expected to tie up a capital injection by the end of February
but the annual meeting, at which refinancing was due to be approved, has been
postponed twice and no new date has yet been set.

MDFI said the meeting would take place after talks with banks and
institutions had been completed. It said it was unrealistic to believe it would
pull out.

Dairy groups have suffered as their selling prices have fallen faster than
raw milk prices. But raw milk prices are starting to come down. Milk Marque
ended its auction of contracts to supply milk from April 1 last Friday.

• Financial Times 09/03/98 page 22