Some 250 jobs are at risk at German dairy giant Muller’s UK operation following news that the company is to review its foodservice delivery arm.
Muller, which is carrying out the review under its Muller Milk & Ingredients arm, said the operation is suffering losses of around GBP5m (US$7.1m) a year.
The operation supplies fresh milk and other products to 3,000 non-residential customers in England and Wales.
The company has confirmed a 45 day review and consultation. It said it wants to wants to use the time to assess whether existing foodservice customers, which include workplaces, restaurants, pubs, bakeries and contract caterers, can be better serviced in other ways by Muller or by alternative providers.
It said the household and educational business managed by sister company, Milk & More is not affected by the review and consultation.
Andrew McInnes, managing director at Muller Milk & Ingredients said: “Whilst the Muller Milk & Ingredients foodservice operation is a very small part of our overall business, it is vital that it is profitable and viable. It is clearly unsustainable in its current format.
“We would therefore like to take this time to assess the role and fit of this part of our business within our wider strategy for the future, and determine whether there are better and more sustainable ways to supply the needs of our smaller food service customers.”
Muller said it will work to “fully evaluate and understand the most appropriate course of action for its employees, customers and the foodservice business”.
The outcome of the review will not be determined until this work is completed, it said.
The foodservice delivery operation was acquired two years ago as part of the Dairy Crest dairies business, and represents less than 2% of the company’s turnover.