The British dairy industry could be reduced to producing little more than raw milk and some high-value cheese if manufacturers do not invest further, an industry analyst has warned.

While Britain had become adept at producing premium cheese, large volumes of cheaper own-label Cheddar were being imported as there were few facilities manufacturing secondary dairy products, said Tony Evans, partner at consultancy Andersons.

"We've got a lack of innovation and leadership on side," he said.

Ireland was in a better position to build a manufacturing base as a low population density in relation to dairy industry output meant it was well placed to export, Evans added.

He did, however, praise Robert Wiseman for investment in its Bridgwater dairy and conceded that some dairy manufacturers had recently upgraded their facilities.