Dairy Crest sees its butter sales melt

Dairy Crest saw sales of its butter and spreads brands fall in the first three months of its year, but said strong demand for Cathedral City helped keep trading on track.

The Surrey-based group, which is selling its dairy arm to Germany’s Muller for £80m, said sales of Clover and Country Life fell in the 12 weeks to the end of June in line with the wider butter and spreads market.

However, the firm said sales of its flagship Cathedral City cheese brand had “another strong quarter, during which it has continued to grow sales and market share”.

Sign up to our Business newsletter

Sign up to our Business newsletter

It added Cathedral City remains the UK’s 16th largest grocery brand and the seventh biggest grocery online brand.

The firm said sales of Frylight cooking oil have continued to perform very strongly during the period.

It added it expects the performance of its cheese and spreads to pick up in the second half of the year.

Chief executive Mark Allen said: “The year has started off as we expected. Higher sales of Cathedral City and Frylight are encouraging in markets that remain challenging.”

In November, German rival Muller agreed to snap up the dairy arm of Dairy Crest. Muller will acquire four dairy sites and 72 depots from Dairy Crest, as well as the flavoured milk brand Frijj.

Dairy Crest said the deal has already been approved by its shareholders.