Arla plans early capacity increase for longer-life milk at new dairy

- Last updated on GMT

Related tags: Milk, European union, European commission, Arla foods

Arla Foods is to inject an additional £20m into its soon-to-be-opened Stourton, Leeds dairy to boost production capacity for Cravendale milk after...

Arla Foods is to inject an additional £20m into its soon-to-be-opened Stourton, Leeds dairy to boost production capacity for Cravendale milk after strong growth of the brand.

The company, which is due to open the flagship dairy in October, said that it would double production of its Cravendale longer-life filtered milk brand over the coming year.

The brand is currently produced at Arla's Hatfield Peverel dairy in Essex. Sales of Cravendale increased by 23% year-on-year and the brand now has a 3% share of the fresh milk market, said Arla.

The first phase of Arla's rationalisation will also be completed this month with the closure of its Bamber Bridge plant in Lancashire. Its glass bottling line at Hatfield Peverel dairy closed in May.

The cost-cutting moves follow Arla's takeover of Express Dairies last year. The company's interim results for the six months to March 31 showed a fall in pre-tax profit to £5m from £6.1m a year before, despite turnover more than doubling to just under £700m.

Arla has just signed a two-year deal with TNT Mail to deliver non-time-sensitive heavy letters and packets through Express Dairies.

sugar cut plan

The European Commission will propose a cut in European Union sugar production quotas of nearly 15%, with an expected consequent drop in sugar prices, according to a leaked draft paper.

The White Paper, due to be released in mid-July, will represent the start of negotiation on cutting sugar subsidies. The European Parliament could take a year to pass the paper. British Sugar said the final outcome was likely to be considerably more moderate than the draft. "We are well placed to meet the challenges of the reform and take advantage of any opportunities it may offer," it said.

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