A Lancashire dairy, Yew Tree Dairy, reported a significant downturn to a pre-tax loss of over £10 million in the year preceding its acquisition by milk and yogurt behemoth Muller, newly-released figures show.
According to financial data for the 12 months ending 31 March 2024, Yew Tree Dairy registered a pre-tax loss of £10.2 million, sliding from a prior year's pre-tax profit of £5.5 million, as reported by .
These results materialised as turnover tumbled from £214.5 million to £181.5 million during that timeframe.
Notably, these developments occur post Muller's successful takeover bid for Yew Tree Diary following approval by the Competition and Markets Authority (CMA) last month.
In a statement, Carl Woodcock of Yew Tree Farm expressed pride in the company's evolution: "As a family-owned and operated company, we're very proud of the progress we've made and the organisation we have built over the last few decades."
Moreover, he noted the successful transition to new ownership: "As it's now time for us to move on to new opportunities, we know we leave the business in good hands with Rob and the rest of the team from Muller."
Woodcock also underscored the importance of legacy and continuity in the sale: "It was important for us to hand over the reins to people who'd look after the business with the same care and consideration as we have over the years, and we're confident that the values and goals we've seen from the Muller family are similar to our own."
He added, referring to the merger: "Joining Muller will help Yew Tree Dairy go from strength to strength, benefitting our staff, farmers and customers and creating a strong and successful future for the British dairy industry."
Regarding the financial losses, observers deemed them 'not wholly unexpected' due to the market context prior to the acquisition.
In its recently submitted accounts, Yew Tree Farm stated that its pre-tax loss of over £10m was "not wholly unexpected" due to the cyclical nature of market trends. The company anticipates a return to profit in the current financial year.
The firm noted: "The 2023/24 year has been one of contrast, with the knock-on effects from the high milk price in the prior year being evident within the first six months."
"As farmers aimed to maximise the benefit from the high milk price observed within 2022/23, the overall milk production increased, with supply exceeding demand this had implications on the milk price."
"Declining milk prices and reduced profit margins have unsurprisingly led to a subsequent reduction in º£½ÇÊÓƵ milk flows compared to the previous period."
"Aside from the much reduced average farm gate milk price when compared to 2022/23, the financial year saw continuing cost pressures within the dairy industry."
"Throughout this period the directors took the decision to support their farmers by subsidising the pence paid per litre for contracted milk".
"The company is well placed to react to these challenges by maximising production efficiencies and minimising supply costs whilst containing to support its farmers positively through our ingredient milk contracts."
