Dairy Crest trading on target
Wednesday, 26 Sep 2007 09:45
Dairy Crest makes Utterly Butterly
Dairy Crest has said its trading is in line with expectations, with growth across its key brands having offset the impact of a Clover butter recall.
In a statement today the UK's biggest dairy producer said brands including Cathedral City cheese, Utterly Butterly spread and Petits Filous yoghurts had performed strongly, while adding that the company had also benefited from the rollout of healthier products.
However the trading update, for the six months to the end of September, warned that Clover volumes had been "significantly impacted" by a product recall in May.
Dairy Crest warned that costs associated with the recall, including improvements at the Clover factory, had combined with higher cream prices to "materially impact" the performance of its UK spreads.
Nonetheless the dairy producer remains confident about its prospects, stressing that its international business, St Hubert, is making "positive progress". Dairy Crest bought the French margarine-maker in January.
Meanwhile the company has stressed that "unprecedented changes" have taken place within the dairy industry since the beginning of the year, with world demand for skimmed milk powder and bulk butter having been "particularly strong".
Together with lower milk production levels, as a result of adverse summer weather, the trend has resulted in higher milk prices and therefore price rises across most dairy categories, Dairy Crest explained.
It said that it subsequently intended to increase the price it pays to its direct suppliers on liquid milk and cheese contracts from October.
"We have been successful in achieving higher prices across a range of products, enabling us, in turn to deliver higher prices to our direct milk suppliers," said Dairy Crest chief executive Mark Allen.
Meanwhile the company revealed that it was reviewing provisional findings by the Office of Fair Trading (OFT), in regard to alleged price fixing, "in detail".
The OFT said on September 20th that it suspected several leading supermarkets and dairy producers, including Dairy Crest, of colluding to keep prices artificially high.