After weeks of speculation, Morrisons has confirmed that it will rationalise its liquid milk supply base.
The multiple - the last of the big four to review its supply arrangements - will ditch Robert Wiseman Dairies and increase the amount of milk it takes from its other suppliers, Dairy Crest and Arla Foods.
Dairy Crest and Arla will each now supply around 50% of Morrisons’ liquid milk.
Wiseman said it would continue to supply Morrisons until October. The loss of the contract will cost it £40m a year in turnover. However, the company said that as a result of changes in milk supply announced by the multiple
retailers in the last 12 months, its net position in terms of volumes sold was expected to be “broadly neutral”.
MD Robert Wiseman said: “We are disappointed about the loss of this customer, which accounts for around 9% of our current volumes. We will take mitigating actions to minimise the impact.”
The announcement will be a relief to investors in Dairy Crest, but will also embarrass commentators who predicted with some certainty that Dairy Crest would lose out in the Morrisons shake out.
Speculation to this effect even caused the processor’s shares to dip sharply last week.
It has been a busy week for Dairy Crest. On Tuesday it was in advanced talks with Midlands Co-operative Society to acquire its dairy operations. Analysts predicted that Dairy Crest would close the dairy.
And on Thursday Dairy Crest announced it had acquired Starcross Foods in a deal worth £16.9m. Starcross operates out of a 100-million-litres a year dairy in Foston, Derbyshire, which only opened three years ago.
Richard Clarke

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