Union blames supermarket price war for Dairy Crest plant closures

Unite warns of death of 'traditional milkman' as Dairy Crest boss defends decision to close bottling plant

(PA)

The supermarket price war is to blame for Dairy Crest’s plan to close two factories, putting 261 jobs at risk, a union has warned.

Union Unite said the “supermarkets’ milk price squeeze” on dairy producers is behind the closures and warned the price of milk in supermarkets is also putting the jobs of milkmen at risk.

Unite national officer Matt Draper said: “As doorstep delivery moves over to the use of plastic bottles, what we are seeing here is the death knell of the traditional milkman.

“The reason for this is that supermarkets are selling four pints for £1, while dairy companies’ delivery prices are 79 pence a pint – they just can’t compete.”

But the boss of Dairy Crest defended the decision to close its Hanworth glass bottling plant as a way to help secure the future of its remaining milkmen.

Chief executive Mark Allen said: “We have to let our milkmen and women know that we are doing all we can to protect their livelihoods.”

Allen said announcing the closure in advance gave “clarity” to the staff who would have time to seek alternative employment.

He added: “This is very tough for the people in Hanworth. But we will do everything for them to help them get another job, from training to internal opportunities.”

The Hanworth glass bottling plant, famous for its rooftop cows overlooking the A316, employs about 200 people and will close in two years’ time as demand for glass bottles has declined. Hanworth was the groups’ last remaining glass bottling plant after it closed Aintree in Merseyside in 2012.

Dairy Crest said milk sold in glass bottles had fallen from 94 per cent of the total in 1975 to below 4 per cent today, as shoppers turned to supermarkets for their milk.

But the group still employs 1400 milkmen and women who will soon switch to delivering plastic bottles. Dairy Crest is stepping up the production of these in its three factories in Chadwell Heath, Foston and Severnside. The range of products available for home deliveries is also increasing, including cheese, eggs and butter.

The group will also close its cream potting facility in Chard, Somerset which employs 60 people and produces products such as brandy butter.

For the six months to the end of September, sales of its four key brands — Cathedral City, Clover, Country Life and milkshake brand Frijj — were up 4 per cent.

Supermarket price pressure has taken its toll on suppliers like Dairy Crest but Allen said: “Supermarkets want the best deal for their customers. But they have always been challenging and that is why we are active with our cost base.”

Analysts at Shore Capital said: “Despite the challenging backdrop, the investment and cost-savings initiatives in dairies, the consolidation of spreads production and the potential from its whey investment… provide for more resilient profit streams and cash flows.”