Scottish milk supplier Graham’s Dairies has blamed a dramatic rise in production costs for a 20% fall in pre-tax profit for the year to March 31.

Managing director Robert Graham jnr claimed that during the year raw material costs had soared by 30%. The biggest rise was in the cost of plastic of packaging while he also cited rising oil prices.

Pre-tax profit fell from £905,200 in 2004 to £721,138. Sales grew 15.6% to £22m for the same period.