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Cheese Makers' Concerns over Milk Supply

05 August 2008

UK - Concerns are growing among European dairy groups over the supply of milk for cheese operations.

Now, according top reports in Dairy Reporter, the major groups are streamlining their operations to offset potential supply difficulties.

As a growing number of European dairy groups streamline their cheese operations to offset milk supply concerns, a leading manufacturer says there may be hope on the horizon for the industry regarding costs.

Astrid Gade Nielsen from Arla Foods, told Dairy Reporter that scarcity in milk supply, which forced it to cut production by 6,200 tonnes at the end of last year, had eased in recent months.

However, she said that any improvements in supply would not necessarily turn things around.

She expected milk prices related to cheese manufacture to balance out in accordance with demand in the long run.

However, a number of processors have already been making severe cuts and changes to their cheese output to adjust for rising costs.

Dairy Crest has announced the proposed disposal of its Stilton and speciality cheese business based at Hartington, Derbyshire, to Long Clawson Dairy Limited for cash proceeds of approximately £3.5 million.

The deal is conditional on the completion of employee consultation and is expected to complete by the end of August 2008.

Mark Allen, Chief Executive of Dairy Crest, said: "This disposal is in line with our strategy to focus future cheese activities on developing our branded and premium retailer branded products. This includes Cathedral City, the UK’s biggest cheddar brand worth over £170 million at retail value. After careful consideration we felt that the best option available for our Stilton business was a sale to Long Clawson."

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