Speculation is mounting over who will end up buying Arla/Milk Link’s Crediton factory, after the supposed frontrunner - Ireland’s Lakeland Dairies - told The Grocer it “had no interest whatsoever in acquiring the Crediton UHT plant.”

Lakeland was widely tipped to buy the Devon plant. It refused to comment on any previous interest, but an industry source said Lakeland had taken a look at Crediton earlier this year and decided not to progress.

First Milk is also rumoured to have shown an interest but is not expected to bid aggressively, leaving Müller as an obvious candidate according to sources close to the deal. Crediton produces UHT milk but also some flavoured milks, making the plant a potential good fit for Müller, should it decide to return to the flavoured milk market.

Arla is having to sell Crediton on competition grounds, following its merger with Milk Link last year.

Hamish Renton, MD of Hamish Renton Associates, said Crediton was a “steady business” with refurbished assets and a significant share of the UHT and large-format flavoured milk market. “The business is well thought of and could be attractive to a domestic purchaser as a stand-alone business with its own pre-existing profit stream and milk pool. A larger, possibly European purchaser might also be interested in the capacity and customers short term, prior to creating a bespoke manufacturing asset elsewhere in the UK,” he added.

First Milk, Müller and Arla all declined to comment.

Topics