Dairy Crest has played down concerns the sale of its dairies business to Müller could be delayed, with CEO Mark Allen telling the City he is “hoping for positive news” soon.

Speaking as Dairy Crest announced its six-month trading update on Tuesday (22 September), Allen said the processor still expected to complete the £80m sale of its liquid milk business – which includes the Frijj brand and its doorstep delivery service – before the end of the year.

“In the meantime, we continue to do everything we can to support our farmers who are facing a particularly tough time at present,” he said.

Concerns had been raised by some industry insiders over the time taken by the Competition & Markets Authority to rubber-stamp the deal. The deadline for the CMA to consider the deal as it is currently being proposed is 19 October, but the regulator said last month it “may come to a decision before this time”.

The CMA also indicated in August it was happy with undertakings put forward by Müller to allay potential competition concerns, particularly in the South West, including a toll-processing agreement to supply and process up to 100 million litres of fresh milk a year to a third party.

The Grocer understands a decision from the CMA had been expected last week, but may have been delayed due to additional input on Müller’s proposals provided by a national supermarket. This, in turn, has sparked fears a more in-depth ‘phase two’ investigation of the deal could now be on the cards, which could significantly delay the deal being completed. The CMA declined to comment.

‘Unhealthy’ delays

NFU dairy board chairman Rob Harrison said any delay in coming to a decision by the CMA would be “unhealthy” for the whole sector – and for Dairy Crest, its staff and milk suppliers in particular.

“This deal was announced last November, and it will be at least 12 months before the deal is done,” he said. “The sector is in crisis, so it’s imperative that the CMA comes to a quick decision.”

Harrison added the toll-processing proposals put forward by Müller “should be enough to satisfy any concerns”, adding he believed retailers had been “working to damage the deal”.

He said: “We need consolidation in this sector and we need investment, but we won’t get that with this type of uncertainty with every merger and acquisition proposal.”