Dairy Crest could close its Nottingham operation in a bid to keep a lid on costs, despite the company predicting a robust performance for its foods division for the first half of the year.

The UK dairy giant said it had achieved double-digit sales growth both in volume and by value for key brands such as Clover, Cathedral City and Country Life, with the foods division as a whole showing “a significant uplift in performance”.

However, the company said the first-half performance of its dairies division was “well down” on 2007 and indicated that it would be taking a firm line on costs, with a consultation now underway over the future of its Nottingham dairy, which employs 215 staff.

“Our foods business has made good progress in the first half of the year and our portfolio of key brands continues to grow strongly,” said chief executive Mark Allen.

“Dairies has been impacted by higher input costs and a weaker ingredients market. The commercial environment has become more challenging over recent months and we are taking actions, including significant cost reductions, to ensure our business and our brands are well positioned for the trading environment ahead.”

The company will announce its first-half results on 13 November.

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