Dairy Crest (DCG) has renewed a contract to supply milk to Sainsbury's for the next three years, removing a significant risk for its milk processing business, given that the supermarket accounts for half of the group's liquid milk sales.
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Dairy Crest has not disclosed the terms of the contract, but implies it is under tougher terms and that these will be offset by cost savings.
The food processor is also shaking up its senior management as part of a drive to make the business simpler. From 1 April, Dairy Crest will consolidate into a single structure, which should lead to annual cost savings of at least £5m and a 3 per cent return on sales in the dairies business.
