Robert Wiseman Dairies has warned that tough market conditions could lead to profits being hit by up to £8.5m this year.

The dairy processor said in its 2008 preliminary results that it had taken longer than anticipated to introduce higher prices as a result of the increased cost of production, a delay that will lead to a £3m hit on profits. This could rise by a further £2m if the situation does not improve.

There has also been a fall in returns for Wiseman's bulk cream sales since late 2007, which could lead to a £3.5m loss. Wiseman's operating profit fell 11.3% this year to £31.6m on the back of its £6.1m OFT fine. On a positive note sales volumes were up 4.1% to a record 1.52 billion litres, with turnover up 10.3% to £722m.

The outlook for the next year is also positive following the opening of the new Bridgwater dairy, new contracts with Booths and Aldi, increased Co-op business and a new contract with Martin McColl, the company said.