Contract to supply milk to Sainsbury's

19 February 2013

Dairy Crest Group plc ("Dairy Crest")

Contract to supply milk to Sainsbury's

Dairy Crest, the leading UK-owned dairy foods company is today announcing that it has retained its contract to supply liquid milk to Sainsbury's from February 2014, after a competitive process. The new contract is for 3 years until 2017. Although the conditions of the contract will change from 2014 our ongoing cost reductions are expected to offset any financial impact on our business.

Dairy Crest continues to focus on driving efficiencies so it can meet customers' demands for cost, quality and service. In its IMS on 7 February 2013 it reported that it was on track to exceed its annual cost savings target by delivering savings of around £23 million for the year ending 31 March 2013 and that it had already identified several meaningful projects for the following year.

Mark Allen, Chief Executive of Dairy Crest, commented:

"We are delighted to have retained our Sainsbury's business. Our track record of making efficiencies allows us to supply our customers with competitively priced milk, pay our farmers a fair price and move towards our medium-term target of 3% return on sales in our Dairies business."