Muller agrees £80m deal to acquire Dairy Crest operations

Dairy Crest 's operations are to be acquired by Muller.

Dairy Crest 's operations are to be acquired by Muller. - Credit: Archant � 2007

German group Muller increased its grip on the UK dairy market today with an £80million deal to buy the operations of Cathedral City maker Dairy Crest.

The yoghurt maker, which operates as Muller Wiseman Dairies in the UK following its acquisition of Robert Wiseman in 2012, is set to acquire four dairy sites and 72 depots, as well as the flavoured milk brand Frijj.

The move, which is subject to competition clearance, will allow Dairy Crest to focus on its cheese and spread operations, which include leading supermarket brands Clover and Country Life.

Muller UK employs 6,000 people across four businesses, with Muller Wiseman operating six dairies from Bridgwater in Somerset to Aberdeen as well as a fresh milk distribution network in the UK. The company buys milk from more than 1,200 British dairy farmers.

Dairy Crest’s dairies operations process and deliver around 1.3billion litres of milk a year to major retailers, plus smaller retailers, coffee shops, hospitals, and residential customers.

The sale was announced as Surrey-based Dairy Crest reported a 95% slide in half-year profits to £900,000, dragged down by volatile milk prices and the cost of plant closures. Revenues rose 1% to £682.1million.

The sale includes factories in Foston, Chadwell Heath and Severnside as well as the Hanworth glass bottling site, where Dairy Crest is already consulting with employees about the site’s future.

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Dairy Crest chief executive Mark Allen said: “Completing this transaction would be a positive development for Dairy Crest and for the UK dairy industry.

“The combination of our dairies operations with those of Muller Wiseman Dairies will create efficiencies and economies of scale that will help to create a more sustainable UK dairy sector that is better placed to compete on the global stage.”

Muller said the combination will lead to production efficiencies and unlock the potential for higher levels of innovation, product development and greater exports of dairy products made in Britain.

Ronald Kers, chief executive of Muller UK & Ireland, said: “We are concerned that the dynamics of the UK fresh milk market are unsustainable for dairy processors in the mid to long term and this acquisition will allow us to reduce our costs, increase our efficiencies and invest in the future.”