Muller to fix its lack of profitability

Muller are embarking on a £100m cost saving exercise called project Darwin which on the face of it will come from activities beyond the farmgate which milk supplying farmers will be pleased to hear.

The project is expected to be completed with 2 years of starting and is already in train.

It’s a big project and will cover logistics, back office, administration, processing and some of Muller’s customers could find they are axed if their business to Muller is loss making.

Clearly Muller is simply making no money in its GB business and this is a major review to make the business profitable and sustainable because current losses cannot continue. 

Muller supply over 50% of all GB liquid milk and if liquid milk consumption declines by 1% per annum that’s 70 million litres a year which has to find a new home.  So after 3 years of 1% declines a 210 million litre liquid processing factory should be closed for the industry to standstill/tread water.  That’s not happening hence today we have over capacity in the liquid sector with everyone chasing volume on wafer thin or non existent margins.