First Milk, the UK dairy co-op, has signed a cheese sales and marketing deal with local supplier Adams Foods.

Adams Foods, the UK arm of The Irish Dairy Board, will cut and pack hard cheese made by First Milk. It will also sell and market the cheese, leaving First Milk to focus on cheddars for export markets.

First Milk said the deal would allow it to focus on developing other areas of its business, including lifestyle nutrition, foodservice excluding hard cheese and overseas markets.

Chief executive Kate Allum said: "This partnership is directly in line with our strategic objective of adding value and delivering a sustainable future for our farmers. It not only enables us to work with a partner to deliver a short, integrated supply chain, but most importantly guarantees secure returns for our members’ milk. Additionally, it will provide a platform for us to focus more of our time and resources on priority growth areas like brand development, lifestyle nutrition and exports."

Adams Foods said the venture would help it expand its own-label, convenience format and branded cheddars.

Ian Toal, chief executive of Adams Foods, said the deal would help it become a "one of the leading suppliers of cheese in the UK" and boost turnover to over GBP500m.

The companies also insisted the agreement would also bring "greater stabilty" to a UK dairy industry that had seen "a period of considerable volatility".