Dairy Crest, the UK’s largest dairy processor, today (29 September) announced the renewal of its contract to supply Morrisons with fresh milk.

The two sides have struck a deal that will run until 2015. Dairy Crest will remain one of two processors – the other is Arla Foods – to supply Morrisons with own-label milk.

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Toby Brinsmead, MD of Dairy Crest’s liquid products business, said: “We are delighted to have been awarded this extension to our contract with Morrisons. We believe our clear focus on quality, service and cost puts us in a good position in a very competitive market.”

A spokesman for Dairy Crest told just-food that the company does not comment on the prices it secures from its customers. However, he said the new deal was “virtually” the same as the previous contract between the two companies, with “roughly” the same volume due to be supplied.

Morrisons, the UK’s fourth-largest grocer, said its deals with Dairy Crest and Arla would provide “long-term security to a large number of dairy farmers” supplying the processors.

The National Farmers Union said the new deal would help Morrisons “secure its milk supply, generate stability and help to build farmers’ confidence in the long-term viability of the British dairy industry”.

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NFU dairy board chairman Mansel Raymond said: “At a time when retailers’ re-tendering their liquid milk contracts is being blamed for driving value out of the supply chain, I am greatly encouraged by Morrisons’ decision to sign such a long term contract with its two milk suppliers.”