July 3, 2007

 

UK dairy still competitive but needs to work on production techniques

 

 

The UK dairy industry remains competitive and more efficient compared to its global counterpart but it still has more room to improve its production techniques to retain the position, according to a new report by national industry association Dairy UK.

 

In a study of 27 international dairy companies from Europe, the US and Australia, British dairy processors are found to be efficient in production though it must still look for ways for more innovative production management, the report said.

 

The findings come as dwindling raw milk supplies and ongoing EU CAP reforms continue to force producers to turn towards value-added production to boost their profits and competitiveness. 

 

The increasing focus by consumers in particular for products that can boast health claims such as functional and enriched foods, increasing the value of raw materials will be vital to the industry's success, the report adds.

 

The potential of the country's processors to tap this market has been linked to the dominance of major dairy groups operating throughout the nation.

 

The industry is currently dominated by seven major processors in the country, with about 90 per cent of total milk processing in England and Wales alone occurring at plants with a capacity of 100 million litres or more, the report added.

 

The quota restraints wound down through CAP reform would processors in both the EU and UK have access to greater technological means than rival markets to cater for consumers needs with limited milk supply

 

However, the report added that this competitiveness had come out a cost for the UK, particularly in terms of smaller businesses as more than 100 companies had sold or closed its operations. Fifty plants and distribution depots are also being axed as cooperatives when larger processors took over.

 

Nonetheless, the report added that improved focus on research and development have remained vital to the UK's dairy sector and having wide access to EU's first-class dairy production.

 

Success, the report added, was dependent on achieving a closer relationship with the consumer and their needs.