Redundancies in the UK dairy industry are feared as food groups Dairy Crest and Unigate yesterday announced a £220 million sterling (€357 million) merger of their milk and cheese businesses. Job cuts were seen inevitable as companies planned to squeeze £25 million in savings from the deal.

This latest rationalisation in the British dairy and liquid milk industry follows Glanbia's withdrawal last year. It sold its liquid milk businesses in the midlands and north-west to Express Dairies for £100 million, the first real move towards rationalisation in the industry.