UK dairy processing giant Dairy Crest has increased its bad debt provision by £4 million pounds, after one of its customers, Quadra foods, went into administration.

In a statement, Dairy Crest announced, "This is the total debt owed to us by Quadra, although we are looking at several options to reduce the amount involved. We expect to treat any charge as an exceptional item in 2011-12 and as such it will not impact on our dividend considerations."

Dairy Crest, which has annual sales of £1.6bn, said this is “An isolated incident” and claimed it will “have no material effect on our year end borrowings."

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