Nearly 500 jobs are at risk at plants run by Dairy Crest in Liverpool and Cambridgeshire after the supermarket milk supplier announced plans yesterday to close two dairies.
The plant closures were announced on the same day that Tesco severed a distribution deal with Dairy Crest. The supermarket is switching from three suppliers to two – Robert Wiseman and Arla – from July. About 3 per cent of the company's milk sales last year were sent to Tesco's shelves.
Dairy Crest said it was facing up to an "extremely challenging" market for milk, but said Tesco remained a "large and important customer" for its other cheese and butter brands: Cathedral City, Country Life and Clover, plus Frijj milkshakes.
It said losing the Tesco contract was not a factor in its decision to shut a glass bottling dairy at Aintree, Merseyside, which employs 220 people, and a site at Fenstanton in Cambridgeshire employing 250 people, instead blaming the "fall in the sales of milk in glass bottles as residential sales continue to decline".
It said the Aintree closure – still subject to staff consultations – would see households across the country receive milk in glass bottles from its Hanworth dairy in Feltham, west London.
Dairy Crest's milk delivery arm employs 4,000 to supply supermarkets, homes, hospitals and businesses. It has begun a consultation on the closures, which are planned for later this year.
Its chief executive, Mark Allen, claimed the closures would protect the future of the milk side of the business. "We believe that this proposed restructuring of our dairies business is the right decision for the long term," he said.
Dairy Crest said its £75m investment programme in three polybottle dairies, at Severnside, Gloucestershire; Chadwell Heath, London; and Foston, Derbyshire, meant they would take on the work of the closed plants.