Muller's sales see £60 million fall
Dairy giant Muller's Shropshire-based UK operation saw its sales decline by almost £60 million in the face of rock-bottom milk prices.
The Market Drayton yoghurt maker reported revenue of £1.34 billion last year, a fall from nearly £1.4bn the year before, and pointed to the difficulties it faced in the liquid milk market.
The issue reflected the difficulties faced by farmers all over the country, who have seen their own farm-gate prices squeezed, with customers such as Muller paying lower prices for produce. As it buys a lot of milk, Muller is affected by the value of milk by-products such as butter and cream, and both those commodities saw their prices hit hard in 2015.
Muller UK & Ireland reported a bottom-line loss of £106m for the year to December 31. That loss was attributable almost exclusively to write-downs on the value of certain assets, and on an underlying basis it achieved a profit of £73.5m.
That too was a decline compared with last year, when it achieved underlying profits of £81.6m, thought to be the result of foreign exchange costs.
In its annual accounts, lodged with Companies House this week, the company said: "Trading in the liquid milk market has continued to be challenging due to intense competition from both national and local milk processors. The business's focus has remained on identifying cost reduction activities within our supply chain and delivering these in a professional manner."
The figures, covering the full year in 2015, display a mixed result for Muller UK & Ireland Group.
It grew its position in the market when measured by sales volumes to 21.1 per cent, but lost market share by value, falling from 225 to 22.1 per cent.
On Boxing Day it completed the takeover of the dairy operations of Dairy Crest. Its results also say Muller "believes the acquisition will help protect the business against some of the uncertainties in the market and improve economies of scale". That takeover has yet to show up in its accounts, as it was completed so late in the year.
Muller employed an average of 4,979 people in its UK operation, a number which has fallen by 100 over the last year. Earlier this week it announced it would be expanding its £17m butter plant in Market Drayton.
It has also been revealed Muller will increase the price it will pay its dairy farmers by 1.5p from November, increasing its rate to 20.94ppl.
