Robert Wiseman Dairies expects to increase farm-gate milk prices to ensure its supplies during the winter period.

The UK dairy group said today (6 July) the move would be a response to cheese manufacturers continuing to increase the amount paid for raw milk.

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In an update on the quarter to 2 July, Robert Wiseman said trading has been “in-line with management expectations.”

It said that sales volumes will benefit from the start of an increase in business with The Co-operative Group next month. Robert Wiseman will supply all of the Co-op’s own-brand milk, with the deal set to benefit around 240 of the milk firm’s producers.

However, it said that over the past 12 months, the business has experienced unprecedented pressure on margins and significant increases in input costs. It said that diesel costs were up 15% on the same period last year, while the cost of resin to produce its plastic bottles is up 18% on the previous year.

“Both of these costs remain higher than the levels experienced when we sought recovery of higher costs from customers earlier in the year,” said company chairman Robert Wiseman.

“Despite these pressures, we have continued to gain volumes and have achieved record levels of efficiency. Given our network of first class facilities and low debt levels, the company has a strong foundation for the future.”

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In May, the company said that net profit for the year ended 2 April was down 24% to GBP27.1m (US$43.4m). It attributed the fall to increased competition and higher costs.

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