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Dairy Crest Further Reduces Exposure to Middle Ground Milk Market

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Dairy Crest Further Reduces Exposure to Middle Ground Milk Market

Dairy Crest Further Reduces Exposure to Middle Ground Milk Market
July 04
11:04 2013

Dairy Crest Group, the leading UK-owned dairy foods company, is to sell its depot-based milk delivery business in the North West to Creamline Dairies for £1.15 million. The sale would further reduce Dairy Crest’s exposure to the ‘middle ground’ milk market. Deliveries to residential and middle ground customers in this region have become less profitable following Dairy Crest’s closure of its Liverpool dairy last year.

Creamline intends to operate the Manchester business and the Liverpool and Wirral business will be acquired by Mortons Dairies. Creamline and Mortons have well-established milk delivery businesses in Manchester and Merseyside. Dairy Crest would retain its freehold or long leasehold interests in five of the seven depots from which it operates the business in this region and will lease them to the new owners.

Should the transaction go ahead around 116 employees and 121 franchisees would transfer from Dairy Crest to the new owners. The employee consultation is likely to be completed in July 2013 and the transaction would complete shortly after.

Mark Allen, chief executive of Dairy Crest, comments: “The proposed sale is in line with our strategy to reduce our exposure to parts of the middle ground market which do not provide us with an appropriate financial return. It would be another step on our journey towards restoring our Dairies business to a 3% operating margin in the medium term.”


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