Dairy Crest sees competitive milk market

The group, whose other key brands are Country Life butter, St Hubert Omega 3 spread and Frijj milkshake, said trading in the six months ending September 30 was in line with expectations and ahead of the same period last year.

Sales of its key brands and milk to major retailers rose in the period, while it has increased selling prices to offset higher material costs.

In line with comments from rival Robert Wiseman two weeks ago, Dairy Crest described the liquid milk market as "currently very competitive".

It announced a new five-year contract with Bradford-based supermarket Morrisons yesterday and is due to commence a deal with Sainsbury's in the next month.

The middle-ground milk market, which cover sales to smaller retailers, independents, coffee shops and foodservice companies, is also tough due to low barriers to entry and Dairy Crest warned that sales volumes in this area were lower in the first half than a year earlier.

The company has continued to support key brands, such as Cathedral City and Country Life, with high levels of advertising and promotions.