Dairy Crest has rejected union criticism of a GBP1.2m (US$1.9m) bonus chief executive Mark Allen stands to be awarded.

Unite, the union that represents workers at the UK dairy group, earlier this week called on Allen to "give up his bonus".

The union is in the middke of pay talks with Dairy Crest and is set to return to the negotiating table at the end of this month. Unite national officer Matt Draper said the bonus was "rank hypocrisy" given the "miserly pay deal for this year" Dairy Crest has offered its 3,000-strong workforce.

A spokesperson for Dairy Crest declined to comment on the pay offer on the table or the progress of talks with the union. However, the spokesperson stressed the bonus was in shares that do not vest until 2017 and was related to various performance metrics. Unite had claimed the bonus was linked purely to the completion of the sale of Dairy Crest's dairies division to Muller.

In a statement, Dairy Crest said: "Dairy Crest is going through a period of significant change. Mark Allen is uniquely placed to lead Dairy Crest through these changes. If successful, he will receive a payment in shares at the end of 2017, the details of which are clearly set out in Dairy Crest’s annual report."

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Dairy Crest is in the process of selling its loss-making milk business to Muller in order to focus on its cheese and spreads assets. The deal is being considered by the UK's competition regulators as it would reduce the number of operators in the liquid milk sector to two main players – Muller and Arla Foods. The Competition and Markets Authority has accepted "in principle" proposals to remedy the competition concerns it had and Muller said it hopes to complete the deal by the end of the year.