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Unigate buys Sussex Dairies

UNIGATE, the food and transport group, yesterday bought another independent milk processor and deliverer, Sussex Dairies, further tightening its grip on the southern milk market.

Unigate, a large supplier of drinking milk in the southern counties from Kent to Cornwall, declined to reveal the purchase price. It expects to close Sussex Dairies' processing dairy at Southwick, shedding 80 jobs.

The acquired business, which has 325 employees, delivers from eight depots to 60,000 customers in the Hastings to Littlehampton area. It also supplies some retailers, including Gateway. Annual turnover is pounds 18m.

The deal does not require approval from the Office of Fair Trading, which last week referred a dairy acquisition in Scotland to the Monopolies and Mergers Commission.

A Unigate spokeswoman said: 'It's a very good infill acquisition for us'. She said the Southwick dairy was likely to be closed.

Last year Unigate bought Abbotts Dairies in Kent. Unigate has about 12 per cent of the UK drinking milk market and is looking for more purchases south of the M4.

The milk market has become highly concentrated in recent years, dominated by three suppliers - Dairy Crest (the commercial arm of the Milk Marketing Board), Northern Foods and Unigate. Dairy Crest will be hived off and floated and the MMB turned into a voluntary co-operative.