Dairy Crest reveals drop in profits

DAIRY Crest, one of the dairy companies which faced angry protests from farmers during the summer because of plans to reduce the farm gate price, has suffered a drop in profits.

DAIRY Crest, one of the dairy companies which faced angry protests from farmers during the summer because of plans to reduce the farm gate price, has suffered a drop in profits.

The company, which owns Cathedral City and Clover, said its half-yearly profits were down by 16%. The figure fell to £2.1m in the six months to September 30 in the dairy division, driven by lower fresh milk volumes after the closure of dairies in Liverpool and Fenstanton, Cambridgeshire, and reversal of cuts in the amount it pays farmers for milk.

In contrast to an 11% drop in dairies revenues, sales of cheese and spreads were 3% higher after an advertising push resulted in double-digit volume growth for its four frontline brands, including Country Life and Frijj.

Across the company, which supplies milk to supermarket customers, adjusted profits were £19.1m. Dairy Crest was hit by a week of blockades amid warnings from farmers plans to cut farm gate prices will force many out of business. The company reversed a planned price cut in August and a month later announced it would increase the amount it pays for milk to 29p on contracts for liquid milk and Davidstow cheese from November 1. The increase of around 3p meant its prices are higher than before prices started to come down from May.

Dairy Crest chief executive Mark Allen said: “We supported our farmers who faced difficult weather and higher animal feed costs by maintaining our milk prices despite lower commodity returns, particularly for cream.”

 
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