The review forms part of the manufacturer’s £100m Project Darwin programme that was announced in February this year. The initiative is designed to drive cost reduction and margin improvement against a backdrop of declining milk consumption.
While the outcome will not be determined until the review has been completed, Müller said a factory closure might be necessary to bring capacity into line with current and future customer requirements. The six dairies under review are Bellshill in Scotland, Manchester, Foston, Droitwich, Severnside and Bridgwater.
Chief executive Patrick Müller said: “It is a matter of considerable regret that we must consult on steps which could result in a restructuring of our dairy network and capacity, but we must ensure the sustainability of our business and address potential over-capacity in our network.”
Müller also announced it was to enter into a logistics partnership with sister company Culina Group, who will assume day to day management control of Müller Milk & Ingredients Distribution from 1 June. All 2,500 employees working in this area will remain part of Müller UK & Ireland.
“The distribution business partnership with Culina Group, a sister company within Müller Group, will put together the two major chilled logistics networks in the UK, ensuring that we can further build upon our reputation for great customer service at the lowest cost,” Patrick Müller added.
Müller’s review of its operations came after the dairy processor reported a £132m loss in the 12 months to 31 December 2017, the fifth year of consecutive net loss reported by the company since accounts began on Companies House in 2013.
The manufacturer cited the acquisition of Dairy Crest's dairy operation as the main reason behind its drop in profit before amortisation, down to £37.9m from £51m in the previous year. However, this acquisition was also the key driver for sales, which were up 6% to £2.1bn.