Arla Foods has reported a 3% fall in full-year pre-tax profit to £31.5bn, on sales up 6% at £1.15bn.

Total fresh milk sales to its top three customers, Tesco, Asda and Morrisons, rose 7% during the year, and sales of UHT milk were up 34% following a new contract with Tesco.

Sales of Lurpak Spreadable Unsalted, launched in January, were double expectations at £2.3m and total sales value of its Cravendale milk increased 19% during the year, the company said.

It will also invest £6m in marketing spend for Cravendale PurFiltre next year.

“Although the market remains challenging and we continue to experience cost pressures, our branded products and fresh milk business provide us with a solid platform from which to drive good progress in 2007 and beyond,” said Sir David Naish, chairman of Arla Foods.