The Arla on-account price will reduce by 2.5 eurocents per kg, with effect from 5 January 2015.

The combined impact of the on-account price and 13^th payment changes takes the quoted UK standard litre to 24.81ppl, a total decrease of 2.03ppl.

Commenting on the reduction, Ash Amirahmadi, Arla’s UK head of milk and member services, said: “Global supply and demand are still out of balance which is continuing to create downward pressure. The knock on impact of weak international prices on the European markets has affected Arla’s business performance, as well as that of the entire dairy industry in Europe.

“The weak, but positive result of the recent GDT auction is welcome, however it is too early to conclude that there is any change in underlying market conditions.”