Dairy Crest is considering shutting its Nottingham dairy as part of an efficiency drive to combat high cost pressure in the dairy ingredients market. Britain’s largest dairy company confirmed this week that it had launched a 90-day consultation process over whether to close the site, which processes 90 million litres of milk every year. Some 215 staff could be affected, with Dairy Crest set to record an £8m exceptional loss in next year’s accounts if the closure goes ahead.

The decision came after Dairy Crest admitted its dairies division’s first-half performance would be well down on the same period last year. This reflected the impact of the dairy ingredients markets, where profits were harder to achieve than a year ago, said chief executive Mark Allen.

“The commercial environment has become more challenging over recent months and we are taking action, including significant cost reduction, to ensure our business and our brands are well positioned for the trading environment ahead,” he added.

In a further bid to improve efficiency, Dairy Crest opened a new regional distribution centre in the West Midlands this week and is evaluating its options in the south east.

Meanwhile, on the sales front, the company defied a tough market to report strong growth across many of its leading lines in the past six months. Clover, Utterly Butterly, Country Life and Cathedral City had double-digit volume and value growth, while St Hubert Omega-3, Petits Filous, Frubes and Frijj managed double-digit value growth. The butters and spreads sector saw a particular uplift this year. Clover Lighter had sold well since its launch in August, Dairy Crest said, and Country Life sales would be further boosted by a major new marketing campaign fronted by John Lydon.

The company also intends to bolster its portfolio of lighter products with the launch of St Hubert Lighter with Omega-3 in the autumn.