UK catching up on processor investment

Published 16 April 18

The UK dairy industry has invested more in processing over the last few years than other main milk producing countries of the EU. According to analysis undertaken by Promar for AHDB, since the end of quotas, major investment* in processing in the UK has surpassed €500m.

Processor investment by year 

When taking into consideration the volume of milk produced in the country, Ireland still leads the way, having invested €1.2c per litre per year over the three years 2015, 2016 and 2017. The UK sits second in this table, well ahead of other main milk producing nations in the EU.

Investment in processing 2015-2017 

The turnaround is notable given the comparative investment levels that were reported two years ago. Countries such as Ireland, the Netherlands and Denmark invested heavily in processing assets on the run up to the end of milk quotas (March 2015). These countries have since recorded significant increases in milk production, justifying the heavy investment. Between 2014 and 2017, Irish milk production increased 29%, the Netherlands rose 15% and Denmark 7%.

Looking at the average investment over the last 7 years, the UK still sits slightly below the EU average, but is no longer bottom of the table.

Investment in processing 2011-2017 

In the UK the rise in milk volumes between 2014 and 2017 has been a more modest 2%. However, investment has picked up significantly in recent years, driven on by the big 2 milk processors; Arla and Müller. This was particularly evident in 2017, post the Brexit vote, and includes investment aimed at displacing imports of products such as cheese, yogurt and butter.

* Based on publically announced investments in physical assets in the country, broken down by the year of announcement, excluding mergers and acquisitions.

# EU average is calculated from the 6 countries shown, and does not include other EU countries.