Dairy Crest in £33m delivery buy

By This Is Money
Updated: 03:37 EDT, 24 July 2006

THE maker of Clover and Country Life today announced plans to acquire doorstep delivery business Express Dairies in a deal worth £33m.

Dairy Crest said the combination with its own doorstep operation would create a business with two million customers and a market share of around 45%.

The deal includes 77 distribution depots, as well as dairies at Liverpool and Nottingham and around 1,850 employees. Dairy Crest said significant cost savings were likely from the tie-up, but did not provide details.

Dairy Crest chief executive Drummond Hall said combining the two businesses made sense in a declining market.

He added: 'We will be able to prolong the life of these businesses by putting them together. We will invest in canvassing, invest in service initiatives and run the business to our model.'

As well as doorstep delivery, the Express operation serves small and medium-sized retailers, wholesalers and organisations such as schools and restaurants.

Arla Foods, which owns Express, said rationalisation in the delivery market had been needed for some time.

Arla chief executive Tim Smith said the sector's share of the liquid milk market in England and Wales had reduced significantly since 2000 - from 25% to 11%.

He added: 'In order for this sector to have a viable future, further consolidation of the industry was required.'

The disposal, which is expected to be completed next month, will enable Arla to concentrate on its Cravendale, Lurpak and Anchor brands, as well as the distribution of fresh milk to supermarket customers.