Dairy Crest retains supermarket contract

UK dairy giant Dairy Crest has held onto its contract to supply milk to Sainsbury’s after extending the agreement with the supermarket chain for another three years. The terms have not been disclosed but Dairy Crest says it expects changes in the contract terms from next year will be offset by ongoing cost savings.

The 1,300 dairy farmer company has held the Sainsbury’s contract since 2004, and it amounts to a third of its liquid milk production. It also has deals with other major UK supermarkets. The  contract will keep Dairy Crest on course to meet its medium-term target of a three per cent return on sales, the company says. Chief executive Mark Allen says he is “delighted” with the contract renewal, which he believes will allow the company to supply customers with competitively priced milk, as well as pay farmers “a fair price”.