moretonhallfarm_26 (1)

Source: Müller UK & Ireland

The deal would allow Müller to grow its export business, the dairy giant said

Müller UK & Ireland has snapped up mid-market milk processor Yew Tree Dairy as part of a push into dairy ingredients.

The acquisition, the value of which has not been disclosed, is subject to CMA approval, and would see Lancashire-based Yew Tree and its pool of around 400 farmers transfer in its entirety to the dairy giant.

Family-owned Yew Tree supplies supply liquid milk and cream to mid-market customers alongside its now main speciality of milk powder production – following a significant investment in its capabilities in recent years.

It posted a turnover of £214.5m in the year to 31 March 2023, up 31% on the previous year, according to its most recent accounts, posted with Companies House. Operating profit fell by 52% to £5.7m, however, amid the financial headwinds that buffeted the dairy sector.

With the acquisition, Müller said it would use Yew Tree Dairy’s production capabilities for milk powder to grow its export business, “drive supply chain resilience and secure a positive future for the British dairy industry”.

Once the deal is completed and CMA approval is gained, Müller said it planned to significantly invest in the capacity and capabilities of Yew Tree’s Skelmersdale milk drying site.

“Tapping into internal expertise and experience from across the Müller group, the business will enhance its milk drying capability, enabling it to become a major producer and exporter of powdered milk products made in Britain, with milk from British dairy farms,” it said.

The deal would benefit customers, consumers, suppliers and employees of both businesses, while offering supplying farmers enhanced opportunities and long-term security, Müller added.

“This significant investment in the British dairy industry underlines our ambition to grow Müller and build a better future for the sector,” said Müller Milk & Ingredients CEO Rob Hutchison.

“Yew Tree Dairy has excellent processing capabilities, a talented team with great expertise, and strong relationships with its customers and supplying farms.”

When with Müller’s “well-invested and resilient network, I am very confident that these two family-owned businesses will complement each other really well”, Hutchison said.

“Britain is a great place for dairy farming and has an excellent reputation for quality, welfare standards and sustainability. This acquisition will enable us to tap into global dairy consumption growth, unlock additional export opportunities and continue to drive supply chain resilience.”

Yew Tree and the controlling Woodcock family were “very proud of the dairy business we have built and are looking forward to seeing the progression and development by Müller of the Skelmersdale operation”, said director Carl Woodcock.

“The family felt the time was right to explore new opportunities whilst retaining our farming roots,” he added.

“We would like to thank all who have been involved in the Yew Tree Dairy business over the years. Our success is in no small part due to our dedicated staff, farmers and customers that have been part of our journey.”

Woodcock said he had known Hutchison for many years, leading to a meeting with the dairy giant’s German owners.

“After meeting with the Müller family, we feel confident that this is the right decision for the business to be part of a larger organisation for the next phase of growth that will benefit our staff, farmers, and customers in the longer term,” he added.

“The key for us was to find a buyer that not only shared our values but had an exciting vision for the future of the great British dairy industry. Following a competitive process, Müller was our clear preference, and we leave our business in really good hands.”