Dairy giant Muller is to wind down production at its Foston dairy in Derbyshire with the potential loss of 223 permanent posts.
The facility is likely to cease operations by the end of the year with processing absorbed by other dairies owned by Müller Milk & Ingredients (MMI).
The decision follows a 45 day statutory review of the company’s dairy network.
It examined factory utilisation against a 'backdrop of declining consumption of fresh milk and significant changes in retailing'.
During the review, Foston dairy was identified to be most at risk due to its size and inability to absorb significant production volume from other dairies, its current level of utilisation and its geographical position relative to customers.
The consultation included discussions with employees and unions. Muller has committed to providing support for all of those affected over the wind down period.
Most dairy farmers unaffected
Most dairy farmers who supply Foston will be unaffected with milk switched to be processed at other dairies.
However, the company will be in contact in the next week with a small number of farmers who are located in areas not close to other dairies in the Muller network, to discuss and consider future options for their milk.
Patrick Müller, Chief Executive at Müller Milk & Ingredients said the news will be 'devastating' for its employees at Foston.
“But if we are to have any prospect of building a fresh milk business which is sustainable in the short and longer term, we need to make significant changes to reduce our costs,” he said.
“MMI has the best invested network in our industry. But we must adapt quickly to meet the realities of a changing market.
“Inaction is not an option and would place at risk the future viability of fresh milk, long regarded as a staple of the nation’s fridges.”
Mr Müller added: “Wherever possible, we will offer our colleagues opportunities to relocate within our network, and we will do everything we possibly can to support those who do not wish to relocate or for whom there are no roles.”
The dairy network review was part of MMI’s Project Darwin programme which aims to secure a sustainable future for the business through cost reduction and margin improvement.
The programme includes a review of every aspect of MMI’s operations, logistics, back office and people organisation to reduce costs.