Denmark-based dairy group Arla Foods has predicted record earnings from its UK business on the back of rising dairy prices.

Arla said its UK arm is expected to see earnings reach DKK300m (US$58.3m) above its original forecast for the current financial year.

The company said it had been able to increase the prices of its dairy products in the UK. Arla said its decision to take full ownership of its UK arm had boosted its whole business with the company able to use its raw materials across the group.

Arla CEO Peder Tuborgh said: "Our history in the UK has been characterised by tough times and the UK business has been a major preoccupation for us - sometimes negatively. But as things stand now, there are no grounds for any further scepticism. The money is there, and the business is developing in a healthy direction."

Arla took full control of its UK business in April and does not give consolidated financial numbers for the market, a spokesperson told just-food.

Last week, Arla hinted that UK milk producers could join the company's cooperative structure.

Arla, which has 1,600 milk suppliers in the UK, has held talks with them on modernising the way the company is run.