UK dairy group Dairy Crest said this morning (17 July) its full-year expectations remained "unchanged" despite a "challenging" first-quarter.
In its interim management statement, released ahead of today's AGM, Dairy Crest said its dairies business had been hit by sector-wide issues. UK dairy companies have seen liquid milk profits dented by the collapse in the value of bulk cream, an important by-product of skimmed and semi-skimmed milk production.
Dairy Crest emphasised it is working to strip costs from its dairies unit and revealed progress has been made on returning the business to "acceptable" levels of profitability. It said it is also in talks with its milk suppliers, at a time when farmers are protesting against a recent string of cuts to farm-gate milk prices in the UK. While the company made no move to reverse these cuts, it did reveal it has agreed to adopt a voluntary code of practice that is designed to rebalance power in the supply chain.
Dairy Crest once again demonstrated the benefits of being a broad-based dairy group, with sales of its four key UK brands increasing by 15%.