UK fresh milk merger may lead to further restructure – DairyCo

The proposed purchase of Dairy Crest’s (DC’s) dairy operations by Muller Wiseman Dairies (MWD) may mean that in the long run further investment and/or consolidation of processing will take place to ensure that MWD realise the potential offered by combining the businesses according to DairyCo.

In an analysis of the deal it says investment in DC’s dairy divisions has been relatively low over recent years. Therefore, it says if the sale is approved, some investment may be required to update these facilities in order to achieve similar levels of efficiency to those seen at MWD’s other, more modern facilities.

DairyCo says if approved, the acquisition of DC’s liquid milk processing facilities at Severnside, Chadwell Heath, Foston and Hanworth, would increase MWD’s liquid milk processing capacity from the current level of around 2.1 billion litres to around 3.5 billion litres per annum.

It says the location of the processing facilities is mostly complementary as MWD’s existing processing facilities are concentrated in the west of England and Scotland, while the acquired sites would provide it with processing capacity in the south and east of England, close to large population centres.

DairyCo says the total processing capacity of the expanded MWD would be 0.5 billion litres more than the current combined milk pool of approximately 3.0 billion litres.

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