Müller reveals major export plans as it agrees Yew Tree Dairy deal

Müller UK & Ireland is taking over Yew Tree Dairy, a 120-year-old family business and a rival milk supplier from Lancashire.

The acquisition is the result of a competitive process in which Müller was the ‘clear preference’ for Yew Tree’s management, who had been looking for a buyer, preferably a larger organization, to steer the business forward.

The deal is set to formally complete later this year, subject to approval from the UK’s competition body.

Shrinking margins and falling profits

Yew Tree Dairy was founded in 1904 and is one of the largest family-owned dairy processors in the country, producing a range of fresh milks, creams and milk powders.

The company works with local farmers in and around the North West England and Scotland, making it a direct competitor to Müller.

But Yew Tree Dairy hasn’t been immune to the challenges that rocked the global dairy industry, with high energy prices and commodity price variations putting pressure on growth.

The company’s operating profit more than halved from 2022 to 2023, decreasing from £11.9m to £5.6m according to its latest full accounts, made up to March 31, 2023. The gross profit margin also fell from 7.6% to 2.8% despite a turnover increase of more than a quarter, from £163.7m to £214.5m.

In the strategic report, the directors highlighted that the company was well-placed to meet market challenges and in a strong financial position.

What the deal means for Müller

DairyReporter reached out to Müller to find out more about the deal, but we were told no further comment will be forthcoming until the acquisition is formally approved.