UK dairy food giant Dairy Crest today announced its first loss in over fifteen years. The company, which last month announced cuts of 2pence per litre to its farmer suppliers with little notice, saw a 62 per cent loss in profits last year. The Dairy Crest price cuts sparked a series of copycat price cuts by other processors.

Although the company’s cheese division reported improved performance, with a 27 per cent increase in profits over the year to March, the dairies division continued to struggle, bringing overall profits down.   

The company’s spreads also fared well. However, profits from the dairies business fell, resulting in an overall loss of 1.9 per cent, or £10.1 million, for the company. As well as cutting prices Dairy Crest is closing two of its factories, one in Liverpool and one in Cambridgeshire.

The company blamed intense competition in the dairy market and reductions in the retail price of milk for the losses.

Chief Executive Mark Allen commented, "Double digit growth in our branded spreads and cheese businesses has offset unsatisfactory results in Dairies. Dairy Crest's results for the year demonstrate the continued benefit of being a broadly based business."

"Going forward, we will continue to take decisive strategic action and proactively shape Dairy Crest for the long-term. In the current financial year, we are seeing continued strong momentum in our Foods businesses and we expect Dairies to benefit from the decisive action we are taking and our continued discipline on costs."

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