UK dairy firm Arla Foods UK has said it plans to launch an Atkins-branded reduced-carbohydrate milk early in 2005.

The company said the new product, which will be made using proprietary filtration technology, is the next step in its plan to develop new added value dairy products.

Although there are signs that the US market for low-carbohydrate products may have peaked already, the UK market is some way behind.

Arla, which this week said it had made good progress in the last year, boosted by the strong performance of the Cravendale and Lurpak brands, also announced plans to expand its Cravendale milk production capacity to enable it to target more customers.

"Cravendale is now achieving over 90% distribution in the key major multiple sector, in which the brand's sales have grown by 33% over the last year. Distribution through other channels to market is significantly lower, simply because capacity constraints have prevented us from targeting these potential customers," the company said.

The company said its £20m (US$38.7m) investment in its Stourton dairy development, scheduled for completion in summer 2005, will create a "real growth opportunity" by doubling its processing capacity for the Cravendale brand.

"We are also planning a £12m investment in a new added-value milk plant at our Ashby site, giving us the capacity to expand our presence in all formats within this growing market," Arla added.