Unigate adds to milk job cuts

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The Independent Online
Britain's embattled dairy industry received another jolt yesterday when Unigate, the country's second-biggest milkman, confirmed it had shed more than 320 jobs and closed two dairies and two distribution centres since November.

The details of a cost-cutting exercise first outlined last summer swiftly followed Thursday's announcement by Northern Foods, Britain's largest milk deliverer, that it was cutting 2,200 jobs.

Northern's further bloodletting followed an announcement last month that it was making 1,250 workers redundant.

Unigate, which has 16 per cent of Britain's liquid milk market, compared with Northern's 25 per cent, revealed yesterday that sales of milk on the doorstep had slumped 16 per cent since the new Milk Marque forced through an 11 per cent rise in milk costs last November. Unigate has said the increase will cost it £40m a year.

A company spokeswoman said job losses had stemmed from the closure of dairies at Worthing and Headcorn on the south coast, and redistribution centres at Hafod and Porth in Wales. Following the job losses, Unigate employs 7,676 in its dairy business.

Unigate, which refused to rule out further redundancies and capacity cutbacks, said the exceptional charge to cover the announced cuts would be unveiled in June with its yearly trading results.

Trading in the second half had slightly outstripped expectations, the company said.

The City liked Unigate's costcutting announcement, pushing the shares up 5p to 377p, with a number of stockbrokers suggesting investors switch investments to the group from Northern Foods, whose shares dipped 3p to 194p.

Michael Bourke, food analyst at Panmure Gordon, the broker, said: "Unigate have positioned themselves better than Northern. For example, they decided to raise doorstep milk prices, while Northern didn't. They at least made higher margins, while both suffered losses in doorstep sales."

The spokeswoman for Unigate said: "We raised prices by 2p a pint to take it up to 41p a pint. It has certainly helped us."