Müller’s UK and Ireland business fell further into the red as costs from its Dairy Crest dairies acquisition in 2015 continued to eat into profits.

Despite a 6% surge in sales to £2.1bn, the dairy group tumbled to a £132.9m operating loss in the year ended 31 December 2017, as impairment charges from the takeover dragged down gains.

Excluding amortisation and impairment, the supplier’s profits were still hamstrung by the deal, blaming integration costs and operating inefficiencies for a fall in profits.

Operating profits before amortisation and impairment fell 25% to £37.9m from £51m in 2016, as commodity inflation and the supermarket price war also piled on pressure.

“Trading in the liquid milk market has continued to be challenging due to intense competition from both national and local milk processors,” company directors said in the accounts’ strategic report.

The integration was “the biggest of its kind in the UK to date”, the report claimed, highlighting that integration costs were the biggest factor in falling profits.

The global dairy giant purchased all of Dairy Crest’s UK dairies and 3,000 milk floats on Boxing Day 2015 for around £80m.

Müller has sought to cover write-offs for the deal in the subsequent five years, resulting in heavy amortization and impairment fees each period, including a £170m charge in 2017.

The integration of the new dairy network was an important driver in the significant increase in sales, however.

Total revenue jumped to £2.1bn as it also benefitted from inflationary growth, despite falling market share in yoghurts and potted desserts.

Its volume market share in the segment slumped from 21.7% to 20.3% in the year as more consumers moved to private label. In yoghurts, price squeezes from supermarkets meant it also saw a drop in value share, although the desserts category saw growth.

However, Müller is set to expand in the private label market following the expansion of its Telford dairy site, which it acquired in 2013.

Despite the squeeze on prices, the supplier invested more than £80m in capital expenditure during the year.

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