Pinta price war puts 10,000 doorstep milkmen at risk

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The Independent Online
AN ESTIMATED 10,000 doorstep milkmen could lose their jobs in the next few years, according to the National Dairymen's Association. They are being squeezed out by the supermarkets' relentless price war, which has undercut the 40p doorstep pinta by nearly half.

David Moxon, the NDA's spokesman, said: "I would be very disappointed if the doorstep share of the domestic milk market fell below 30 per cent in the next five years, compared with around 50 per cent now."

But even that estimate, which is regarded as conservative by City analysts, would cut the present 25,000 milkmen in the UK to about 15,000.

These dismal predictions have emerged days before what are expected to be disastrous year-end results and more job losses at Britain's two biggest milk producers: Northern Foods, owner of Express Dairies, and Unigate.

According to the latest issue of the Earnings Guide, analysts expect that on Tuesday Northern will announce a drop in profits from pounds 157.2m to pounds 119.5m for the year to March. Unigate, reporting tomorrow, will show a fall of only pounds 7m to pounds 106m because the collapse in its milk operations will have been shielded by a highly profitable baby foods business.

In March, Northern axed 2,200 jobs at its dairies in the North, Midlands and London. At the same time, Unigate closed two dairies, two distribution centres, and a dairy products factory at Totnes in Devon, losing 324 jobs. The company warned that further rationalisation would follow the year's results.

With wholesale milk prices up 11 per cent and prices to the public rising nearly as much, Unigate's doorstep sales have slumped 16 per cent and the decline is accelerating. On Friday, Park Foods, the hamper business, said that its sales had been affected as it relied heavily on milkmen to sell its hampers.

The main reason for the price rises has been the deregulation of the Milk Marketing Board and its replacement last November with Milk Marque.

Christopher Haskins, Northern's chairman, has attacked "foolhardy competition between dairy companies''.

Northern is likely to reveal a large exceptional charge for the year, to meet the cost of the redundancies and closures. Last week, the company signalled the start of diversification away from milk by buying Green Isle, an Irish frozen foods business. Unigate has been moving into fats, yoghurts and desserts.