Dairy Crest Group plc ('Dairy Crest'), the leading UK-owned dairy foods company, is today announcing that it is consulting with staff on a proposal to sell its depot-based milk delivery business in the North West to Creamline Dairies Limited ('Creamline') for £1.15 million. The sale would further reduce Dairy Crest's exposure to the 'middle ground' milk market. Deliveries to residential and middle ground customers in this region have become less profitable following Dairy Crest's closure of its Liverpool dairy last year.

We have been informed that Creamline intends to operate the Manchester business and the Liverpool and Wirral business will be acquired by Mortons Dairies Limited ('Mortons'). Creamline and Mortons have well-established milk delivery businesses in Manchester and Merseyside.

Dairy Crest would retain its freehold or long leasehold interests in five of the seven depots from which it operates the business in this region and will lease them to the new owners.

Should the transaction go ahead around 116 employees and 121 franchisees would transfer from Dairy Crest to the new owners.

The employee consultation is likely to be completed in July 2013 and the transaction would complete shortly after.

Commenting on the proposed sale, Mark Allen, Chief Executive of Dairy Crest said:

"The proposed sale is in line with our strategy to reduce our exposure to parts of the middle ground market which do not provide us with an appropriate financial return. It would be another step on our journey towards restoring our Dairies business to a 3% operating margin in the medium term."

For further information:

Dairy Crest Group plc
Arthur Reeves 01372 472236

Brunswick
Simon Sporborg 020 7404 5959