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Dairy Crest finds potential delivery buyer

Dairy Crest finds potential delivery buyer

Dairy Crest is to consult with its staff over plans to sell its depot milk delivery business to Creamline Dairies Limited for £1.15 million.

The consultation period with employees is to take place throughout July, with the completion of the transaction expected shortly afterwards.

Dairy Crest, which is the largest dairy-food producer in the UK, claims the sale of the facility in the North West would continue to reduce its exposure to the 'middle ground' milk market.

The closure of the company's Liverpool dairy last year has led to a decline in the value of its deliveries to residential and middle ground customers in the region.

Dairy Crest claims that Creamline has already stated its intention to maintain its Manchester business, while operations in Liverpool and the Wirral are set to be acquired by Mortons Dairies Limited.

Both Creamline and Mortons are well established in the Manchester and Merseyside areas, and are reportedly looking to ensure that reputation continues.

Four depots would be added to Creamline's portfolio, including Stockport, Fixton, Warrington and Macclesfield, while turnover could be set to increase to £30 million for the year ending September 2014.

Should any deal go through, Dairy Crest will keep its freehold or long leasehold interests in five of the seven depots concerned, while leasing them to their new owners. A potential deal would also see the transfer of 116 workers and 121 franchisees.

Mark Allen, chief executive of Dairy Crest said: "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 per cent operating margin in the medium term."

Creamline's joint managing director Chris Swallow told TheBusinessDesk.com: "We are very excited about this deal and the potential for growth in our online business which we can now roll-out to Greater Manchester and Warrington."

 

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