Arla's lactose-free cows milk Lactofree is still a loss maker almost two years after launch, the company has admitted.

However, its long-term potential as a revenue earner was significant, said senior innovation and development brands manager Arun Prabhu. Speaking at a technology forum in Dublin, he said: "It's still only a £3M brand, but as it retails at twice the price of standard milk it adds value for all stakeholders.

"We're investing in it because we believe it has potential to become a major revenue earner."

Arla, which was awarded 'Company of the Year' at this year's Food Manufacture Excellence Awards, recently launched Lactofree in the Irish Republic, where it was flying off shelves, said Prabhu.

"You have to have patience. Cravendale was deeply in the red four years after launch but we believed in it and reaped the benefits. Today it's a £100M brand."

He added: "Retailers pile all this pressure on you to launch new products, and then they give you six months before you are judged against products that have been on the market for years. You're set up to fail."