FDBusiness.com

Dairy Crest is consulting staff on plans to break up its milk delivery business in the north west of England and sell it off for £1.15M to Creamline Dairies.

In a statement, the company said the sale would further reduce its exposure to the ‘middle ground’ milk market.

Deliveries to residential and middle ground customers in the north west region had become less profitable following its closure of its Liverpool dairy last year, it stated.

Creamline aims to operate milk deliveries in the Manchester area, while Mortons Dairies will take over the Liverpool and Wirral business. Creamline and Mortons have existing longstanding milk delivery operations in these respective areas.

Seven depots

Dairy Crest would retain its freehold or long leasehold interests in five of the seven depots from which it operates the milk delivery business and said it would lease them to the new owners.

Should the transaction go ahead around 116 employees and 121 franchisees would transfer from Dairy Crest to the new owners.

Dairy Crest announced today (July 2) that it expects to complete the employee consultation later this month and the transaction itself shortly after that. It is unclear at this stage whether any jobs are under threat as a result of the move.

“The proposed sale is in line with our strategy to reduce our exposure to parts of the middle ground market which do not provide us with an appropriate financial return,” said Dairy Crest chief executive Mark Allen. “It would be another step on our journey towards restoring our dairies business to a 3% operating margin in the medium term.”